Cars.com: Strategic Advancements and Financial Strength Drive Buy Rating

Analyst Gary Prestopino of Barrington maintained a Buy rating on Cars (CARS – Research Report), retaining the price target of $25.00.

Gary Prestopino has given his Buy rating due to a combination of factors that highlight Cars.com’s strategic advancements and financial health. The company has made significant strides in developing a technology-driven platform that supports vehicle dealerships in managing the entire retail lifecycle. This progress, particularly with the acquisition of DealerClub, positions Cars.com to offer a comprehensive solution that integrates vehicle appraisal, acquisition, and sales channels.
Moreover, Cars.com’s platform strategy, which combines a leading consumer marketplace with dealer software tools, sets it apart from competitors and offers substantial growth potential. The company is also demonstrating strong financial performance, with increased product adoption and a solid cash flow generation that supports shareholder returns through share repurchases. Despite market challenges, Cars.com maintains a robust outlook with expectations for revenue growth and improved EBITDA margins, making it an attractive long-term investment opportunity at its current valuation.

Prestopino covers the Consumer Cyclical sector, focusing on stocks such as Dorman Products, Cars, and ACV Auctions. According to TipRanks, Prestopino has an average return of 13.7% and a 53.80% success rate on recommended stocks.

In another report released on May 9, B.Riley Financial also maintained a Buy rating on the stock with a $21.00 price target.