Cars (CARS – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Gary Prestopino from Barrington maintained a Buy rating on the stock and has a $25.00 price target.
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Gary Prestopino has given his Buy rating due to a combination of factors including Cars Commerce’s strong financial performance and strategic advancements. The company reported better-than-expected revenue and adjusted EBITDA for Q1/25, surpassing both their own estimates and consensus expectations. This strong performance was highlighted by an adjusted EBITDA margin that exceeded guidance, along with significant share repurchases facilitated by robust free cash flow.
Additionally, Cars Commerce’s strategic initiatives, such as the integration of DealerClub, have positioned it as a comprehensive platform for managing the entire vehicle lifecycle. The acquisition of DealerClub, a digital wholesale auction platform, is seen as a potential game changer, offering a unified solution for vehicle appraisal, acquisition, and sales. The company’s growth in dealer count and increased interest in its products like Accu-Trade and DealerClub further underscore its potential for continued market share gains and product penetration, supporting the Buy rating.