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Cars
(NYSE:CARS)
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Rating:63Neutral
Price Target:
$11.00
▼(-10.86% Downside)
Action:Reiterated
Date:10/01/26
The score is driven primarily by solid financial performance (strong cash generation and improved revenue growth) and a constructive earnings update (margin expansion, reaffirmed guidance, and significant buybacks). These positives are tempered by weak technical momentum (below key moving averages with negative MACD/low RSI) and only fair valuation support (P/E ~18 with no dividend yield provided), plus ongoing business headwinds in OEM/national revenue and Solutions/website trends.
Positive Factors
Marketplace growth and subscriber momentum
Marketplace growth, recovering subscriber levels, and record average revenue per dealer indicate improving engagement with Cars.com’s core platform. These trends can support durable revenue expansion because stronger dealer participation and monetization reinforce the marketplace’s value to both shoppers and sellers.
Negative Factors
OEM and national revenue weakness
The sharp OEM and national revenue decline shows that a meaningful business channel remains under pressure. Although management expects sequential improvement, the company must first stabilize this revenue stream before it can contribute reliably to growth, creating execution risk over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Marketplace growth and subscriber momentum
Marketplace growth, recovering subscriber levels, and record average revenue per dealer indicate improving engagement with Cars.com’s core platform. These trends can support durable revenue expansion because stronger dealer participation and monetization reinforce the marketplace’s value to both shoppers and sellers.
Read all positive factors
Cars (CARS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$510.70M
Dividend YieldN/A
Average Volume (3M)637.47K
Price to Earnings (P/E)16.7
Beta (1Y)1.49
Revenue Growth1.08%
EPS Growth-6.71%
CountryUS
Employees1,700
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.58
Shares Outstanding53,532,715
10 Day Avg. Volume805,481
30 Day Avg. Volume637,472
Financial Highlights & Ratios
PEG Ratio-0.68
Price to Book (P/B)1.56
Price to Sales (P/S)1.02
P/FCF Ratio4.99
Enterprise Value/Market Cap2.02
Enterprise Value/Revenue1.42
Enterprise Value/Gross Profit1.72
Enterprise Value/Ebitda7.23
Forecast
1Y Price Target
$14.13Price Target Upside14.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)2
Revenue Forecast (FY)$728.80M
Cars Business Overview & Revenue Model
Company Description
Cars.com Inc. operates as a leading digital platform, offering comprehensive services and solutions specifically tailored for the automotive sector. Its central purpose is to seamlessly connect prospective car buyers with vehicle sellers. Through ...
How the Company Makes Money
Cars.com primarily makes money by selling subscription-based and performance-oriented digital marketing products to automotive dealers and other vehicle sellers. Key revenue streams typically include: (1) dealer subscriptions and package fees that...
Cars Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call highlighted tangible progress converting strategy into results — marketplace growth, record ARPD, improved product deployment velocity, adjusted EBITDA and margin expansion, cost discipline, strong early AI engagement and active share repurchases. Key near-term challenges include a meaningful decline in OEM/national revenue (-18% YoY), reduced website units and Solutions uptake, lower add-on media adoption, and a deliberate decline in broad traffic as the company refocuses on higher-quality visitors. New monetization initiatives (Dealer Verified Listings, AccuTrade integration) are promising but early-stage. Overall, the positives around marketplace momentum, margin expansion and product cadence significantly outweigh the headwinds, though management will need to sustain execution to convert early product wins into broader Solutions/website recovery.Positive Updates
Revenue in Line with Guidance and Modest Growth
Q2 revenue of $179.9 million was within guidance and grew +1% year-over-year, and management reaffirmed full-year 2026 guidance of flat to +2% revenue growth.
Negative Updates
OEM & National Revenue Decline
OEM and national revenue declined -18% year-over-year in Q2 and was down approximately $3 million year-over-year; management characterized Q2 as a trough with expectations of quarter-over-quarter improvement beginning in Q3.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue in Line with Guidance and Modest Growth
Q2 revenue of $179.9 million was within guidance and grew +1% year-over-year, and management reaffirmed full-year 2026 guidance of flat to +2% revenue growth.
Read all positive updates
Company Guidance
Management guided Q3 revenue to be flat to up 2% year‑over‑year with adjusted EBITDA margin expected between 28.5% and 29.5%, and reaffirmed full‑year 2026 guidance of flat to 2% revenue growth and a 29%–30% adjusted EBITDA margin, noting anticipated quarter‑over‑quarter improvement in OEM/national revenue; they also said they are pacing toward a $90M 2026 share‑repurchase target (YTD buybacks 6.2M shares for $57M, retiring >10% of shares outstanding) backed by YTD free cash flow of $43.5M, H1 operating cash flow of $55.6M, $450M of debt outstanding and $333.3M of total liquidity—anchored by Q2 results of $179.9M revenue, $53M adjusted EBITDA and a 29.4% adjusted EBITDA margin.Cars Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
58
Neutral
Cash Flow
76
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 725.63M | 723.24M | 719.15M | 689.18M | 653.88M | 623.68M |
| Gross Profit | 602.37M | 600.51M | 594.82M | 566.98M | 538.92M | 509.48M |
| EBITDA | 143.04M | 187.15M | 201.24M | 151.53M | 152.29M | 150.14M |
| Net Income | 34.30M | 20.05M | 48.19M | 118.44M | 17.21M | 10.79M |
Balance Sheet | ||||||
| Total Assets | 1.01B | 1.06B | 1.11B | 1.17B | 1.02B | 1.01B |
| Cash, Cash Equivalents and Short-Term Investments | 33.29M | 56.24M | 50.67M | 39.20M | 31.71M | 39.07M |
| Total Debt | 447.13M | 468.47M | 455.29M | 483.25M | 472.38M | 466.32M |
| Total Liabilities | 568.83M | 589.89M | 600.38M | 680.34M | 640.44M | 609.18M |
| Stockholders Equity | 443.61M | 472.53M | 511.49M | 492.11M | 384.43M | 398.02M |
Cash Flow | ||||||
| Free Cash Flow | 149.82M | 147.35M | 149.52M | 115.84M | 108.80M | 118.81M |
| Operating Cash Flow | 151.58M | 151.64M | 152.52M | 136.72M | 128.51M | 138.00M |
| Investing Cash Flow | -32.40M | -49.40M | -24.60M | -97.05M | -84.38M | -39.45M |
| Financing Cash Flow | -113.54M | -96.62M | -115.96M | -31.75M | -51.49M | -127.20M |
Cars Technical Analysis
Negative
12.34
Price Trends
11.43
Negative
11.00
Negative
10.72
Negative
Market Momentum
-0.53
Positive
34.71
Neutral
23.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CARS, the sentiment is Negative. The current price of 12.34 is above the 20-day moving average (MA) of 10.64, above the 50-day MA of 11.43, and above the 200-day MA of 10.72, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 34.71 is Neutral, neither overbought nor oversold. The STOCH value of 23.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CARS.
Cars Risk Analysis
Cars disclosed 36 risk factors in its most recent earnings report. Cars reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cars Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.54B | 5.58 | 4.72% | 9.03% | -16.67% | -32.32% | |
73 Outperform | $683.30M | 6.52 | 50.29% | 1.11% | 22.75% | 144.55% | |
72 Outperform | $998.45M | 9.18 | 18.61% | ― | 1.50% | -6.82% | |
72 Outperform | $2.56B | 15.64 | 56.25% | ― | 6.01% | 47.62% | |
63 Neutral | $510.70M | 16.66 | 7.40% | ― | 1.08% | -6.71% | |
63 Neutral | $592.42M | 6.10 | 8214.45% | ― | 13.84% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
CARS
Cars
9.74
-0.93
-8.72%
YELP
Yelp
19.37
-11.81
-37.88%
ATHM
AutoHome
20.37
-4.63
-18.53%
CARG
CarGurus
29.24
-4.75
-13.97%
EVER
EverQuote
20.74
-1.26
-5.73%
MAX
MediaAlpha
10.68
-0.12
-1.11%
Cars Corporate Events
Business Operations and StrategyExecutive/Board Changes
Cars.com Announces CFO Transition and New Financial Leadership
Positive
Sep 30, 2026
On September 30, 2026, Cars.com announced a planned chief financial officer transition, with long-time CFO Sonia Jain stepping down from the role effective November 6, 2026 and moving into an Executive Advisor position through March 31, 2027 to su...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.