CarGurus Inc. (CARG) saw its stock plummet 5.60% in Friday's pre-market trading session, despite reporting better-than-expected second-quarter earnings. The online automotive marketplace company's shares took a hit as investors appeared to focus on the company's third-quarter guidance.

CarGurus reported Q2 non-GAAP earnings of $0.57 per diluted share, surpassing both the $0.39 reported a year earlier and the analysts' expectations of $0.54 per share. Revenue for the quarter ended June 30 rose to $234 million, up from $218.7 million in the previous year and slightly above the $232.7 million forecasted by analysts.

However, the company's Q3 guidance seems to have sparked concerns among investors. CarGurus expects non-GAAP earnings of $0.50 to $0.58 per share for the third quarter, with the midpoint of $0.54 just below the analysts' consensus of $0.55. This guidance, coupled with the fact that CarGurus shares had already fallen by 5.0% this quarter and lost 12.9% year-to-date, likely contributed to the sharp decline in stock price.

Despite the current stock plunge, several analysts remain optimistic about CarGurus' prospects. UBS raised its price target to $36 from $33, while Needham increased its target to $44 from $39. The current average analyst rating on the shares is "buy," with a median 12-month price target of $40.00, suggesting potential upside from the last closing price of $31.41.