Cars.com, Inc. (CARS)
NYSE:CARS
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Cars
(NYSE:CARS)
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Rating:71Outperform
Price Target:
$11.00
▲(3.87% Upside)
Action:Upgraded
Date:05/09/26
The score is driven primarily by strong cash flow and a strengthened balance sheet, reinforced by favorable technical momentum. It is held back by uneven profitability and conservative 2026 guidance with near-term margin headwinds, while valuation (P/E 24 with no dividend yield provided) is only moderate for the growth outlook and restructuring adds execution risk.
Positive Factors
Balance Sheet Strength
A debt-free trailing twelve months and materially reduced leverage provide durable financial flexibility. This supports capital allocation optionality—buybacks, opportunistic M&A, revolver paydown—and increases resilience against cyclical OEM ad weakness over the next 2–6 months.
Negative Factors
Profitability Volatility
Wide swings in net and operating margins indicate earnings quality risk; until margins stabilize, free cash flow and ROE may remain inconsistent. This raises execution risk if revenue growth does not reliably translate into sustained earnings improvement.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
A debt-free trailing twelve months and materially reduced leverage provide durable financial flexibility. This supports capital allocation optionality—buybacks, opportunistic M&A, revolver paydown—and increases resilience against cyclical OEM ad weakness over the next 2–6 months.
Read all positive factors
Cars (CARS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$569.09M
Dividend YieldN/A
Average Volume (3M)875.12K
Price to Earnings (P/E)22.4
Beta (1Y)1.39
Revenue Growth0.90%
EPS Growth-35.80%
CountryUS
Employees1,800
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.43
Shares Outstanding55,903,027
10 Day Avg. Volume1,057,317
30 Day Avg. Volume875,119
Financial Highlights & Ratios
PEG Ratio-0.65
Price to Book (P/B)1.56
Price to Sales (P/S)1.02
P/FCF Ratio4.99
Enterprise Value/Market Cap1.68
Enterprise Value/Revenue1.32
Enterprise Value/Gross Profit1.59
Enterprise Value/Ebitda6.11
Forecast
1Y Price Target
$13.50Price Target Upside27.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)2.19
Revenue Forecast (FY)$729.03M
Cars Business Overview & Revenue Model
Company Description
Cars.com Inc. operates as a digital marketplace and provides solutions for the automotive industry. Its platform connects car shoppers with sellers. The company, through its marketplace, dealer websites, and other digital products, showcases deale...
How the Company Makes Money
Cars primarily makes money by selling subscription-based digital advertising and software/technology solutions to automotive dealers and other industry customers. Key revenue streams typically include (1) dealer subscriptions/listings and marketpl...
Cars Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Neutral
The call conveyed cautious optimism: the company delivered modest revenue growth, steady adjusted EBITDA margins, strong free cash flow conversion and demonstrated product and marketplace traction (AI features, AccuTrade IMS, Premium Plus uptake). However, growth remains low single-digit, GAAP net income declined appreciably year-over-year, OEM/national advertising remains a volatile headwind, and near-term margins will be impacted by acquisition-related losses and some elevated expenses. Management outlined a clear plan to prioritize marketplace integration, cost efficiencies, and product rollout with an expectation of reaccelerating growth over the short-to-medium term, but near-term guidance is conservative.Positive Updates
Modest Revenue Growth and Q4 Performance in Line with Guidance
Full-year 2025 revenue of $723.0M, up 1% year-over-year; Q4 2025 revenue of $183.9M, up 2% year-over-year and in line with guidance.
Negative Updates
OEM & National Advertising Weakness
OEM and national revenue was down roughly $1.5M year-over-year in Q4; management expects OEM / national revenue to be flat to down for full-year 2026 and flagged continued near-term weakness into Q1 (noting absence of many automaker Super Bowl ads as an example of evolving OEM spend).
Read all updates
Q4-2025 Updates
Positive
Negative
Modest Revenue Growth and Q4 Performance in Line with Guidance
Full-year 2025 revenue of $723.0M, up 1% year-over-year; Q4 2025 revenue of $183.9M, up 2% year-over-year and in line with guidance.
Read all positive updates
Company Guidance
Cars.com guided 2026 revenue to be flat to up 2% (Q1 flat to up 1%), with dealer revenue—which represents roughly 90% of mix—expected to continue growing year‑over‑year while OEM & national (≈9% of revenue) is expected to be flat to down; full‑year adjusted EBITDA margin is projected at 29%–30% (Q1 26%–27%) with absolute adjusted EBITDA dollars expected to increase YoY, noting DealerClub will generate EBITDA losses in 2026 (more pronounced in Q1); capital allocation calls for a minimum $60M in share repurchases (opportunistically larger with excess free cash flow) and continued revolver paydown to improve a year‑end 2025 net leverage of 1.9x, all while prioritizing marketplace-driven ARPD expansion and product monetization.Cars Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
76
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 724.44M | 723.24M | 719.15M | 689.18M | 653.88M | 623.68M |
| Gross Profit | 600.91M | 600.51M | 594.82M | 566.98M | 538.92M | 509.48M |
| EBITDA | 156.41M | 187.15M | 201.24M | 151.53M | 152.29M | 150.14M |
| Net Income | 27.04M | 20.05M | 48.19M | 118.44M | 17.21M | 10.79M |
Balance Sheet | ||||||
| Total Assets | 1.05B | 1.06B | 1.11B | 1.17B | 1.02B | 1.01B |
| Cash, Cash Equivalents and Short-Term Investments | 64.60M | 56.24M | 50.67M | 39.20M | 31.71M | 39.07M |
| Total Debt | 451.82M | 468.47M | 455.29M | 483.25M | 472.38M | 466.32M |
| Total Liabilities | 592.66M | 589.89M | 600.38M | 680.34M | 640.44M | 609.18M |
| Stockholders Equity | 460.75M | 472.53M | 511.49M | 492.11M | 384.43M | 398.02M |
Cash Flow | ||||||
| Free Cash Flow | 158.25M | 147.35M | 149.52M | 115.84M | 108.80M | 118.81M |
| Operating Cash Flow | 161.99M | 151.64M | 152.52M | 136.72M | 128.51M | 138.00M |
| Investing Cash Flow | -34.92M | -49.40M | -24.60M | -97.05M | -84.38M | -39.45M |
| Financing Cash Flow | -94.23M | -96.62M | -115.96M | -31.75M | -51.49M | -127.20M |
Cars Technical Analysis
Positive
10.59
Price Trends
9.91
Positive
10.22
Positive
11.15
Negative
Market Momentum
-0.10
Positive
50.90
Neutral
72.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CARS, the sentiment is Positive. The current price of 10.59 is above the 20-day moving average (MA) of 10.47, above the 50-day MA of 9.91, and below the 200-day MA of 11.15, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 50.90 is Neutral, neither overbought nor oversold. The STOCH value of 72.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $569.09M | 22.40 | 5.71% | ― | 0.90% | -35.80% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
50 Neutral | $495.66M | -12.05 | 48.78% | ― | 79.27% | 98.99% | |
48 Neutral | $106.60M | -1.08 | -2.60% | ― | -2.67% | -1336.84% | |
48 Neutral | $61.19M | -0.93 | -38.32% | ― | 41.94% | 72.15% | |
42 Neutral | $176.35M | -0.47 | -54.82% | ― | 507.80% | -1128.92% | |
42 Neutral | $80.59M | -28.04 | -22.56% | ― | 12.85% | ― |
* Communication Services Sector Average
CARS
Cars
10.28
0.03
0.29%
CRMT
America's Car-Mart
12.29
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-75.30%
UXIN
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2.25
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CANG
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0.44
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-90.31%
SDA
SunCar Technology Group
0.82
-1.84
-69.32%
VRM
Vroom, Inc.
11.80
-12.21
-50.85%
Cars Corporate Events
Business Operations and StrategyExecutive/Board Changes
Cars Announces Major Workforce Cuts in Cost Restructuring
Negative
Apr 9, 2026
On April 9, 2026, Cars announced a cost reduction program that includes cutting approximately 11% of its full-time workforce, affecting certain management and two executive roles. This move signals a significant restructuring effort aimed at lower...
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.