Rajat Gupta CFA, an analyst from J.P. Morgan, maintained the Hold rating on Cars (CARS – Research Report). The associated price target is $17.00.
Rajat Gupta CFA’s rating is based on a combination of factors, including Cars.com’s recent financial performance and future guidance. The company’s 4Q24 results showed a revenue miss compared to expectations, although EBITDA was in line due to better operational expense control. However, the guidance for 1Q25 was notably weaker, with revenue and EBITDA projections falling short of prior estimates, indicating a slow start to the year.
Despite these challenges, there are positive aspects such as the increased adoption of Accu-trade and higher OEM and National revenue, which grew significantly year-over-year. The company anticipates revenue acceleration in 2Q25 and beyond, driven by stability in dealer churn and new endorsements from OEMs. Additionally, Cars.com sees opportunities for growth through new sales leadership and product repackaging strategies. These mixed signals contribute to the Hold rating, reflecting both the potential for future growth and the current uncertainties.
Gupta CFA covers the Consumer Cyclical sector, focusing on stocks such as Carvana Co, Asbury, and CarMax. According to TipRanks, Gupta CFA has an average return of 14.7% and a 58.55% success rate on recommended stocks.