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CARS.COM INC (CARS) Stock Fundamental Analysis

NYSE:CARS - New York Stock Exchange, Inc. - US14575E1055 - Common Stock - Currency: USD

15.89  -0.62 (-3.76%)

After market: 15.89 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to CARS. CARS was compared to 71 industry peers in the Interactive Media & Services industry. Both the profitability and the financial health of CARS get a neutral evaluation. Nothing too spectacular is happening here. CARS has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

CARS had positive earnings in the past year.
CARS had a positive operating cash flow in the past year.
In multiple years CARS reported negative net income over the last 5 years.
Each year in the past 5 years CARS had a positive operating cash flow.
CARS Yearly Net Income VS EBIT VS OCF VS FCFCARS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M -400M -600M

1.2 Ratios

The Return On Assets of CARS (3.51%) is better than 72.73% of its industry peers.
The Return On Equity of CARS (7.81%) is better than 77.27% of its industry peers.
With a decent Return On Invested Capital value of 3.68%, CARS is doing good in the industry, outperforming 65.15% of the companies in the same industry.
CARS had an Average Return On Invested Capital over the past 3 years of 4.61%. This is significantly below the industry average of 12.57%.
Industry RankSector Rank
ROA 3.51%
ROE 7.81%
ROIC 3.68%
ROA(3y)4.28%
ROA(5y)-16.49%
ROE(3y)10.42%
ROE(5y)-47.94%
ROIC(3y)4.61%
ROIC(5y)3.64%
CARS Yearly ROA, ROE, ROICCARS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -50 -100 -150 -200

1.3 Margins

CARS has a Profit Margin of 5.46%. This is in the better half of the industry: CARS outperforms 75.76% of its industry peers.
CARS's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 6.79%, CARS is doing good in the industry, outperforming 71.21% of the companies in the same industry.
CARS's Operating Margin has declined in the last couple of years.
CARS has a Gross Margin (67.47%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of CARS has declined.
Industry RankSector Rank
OM 6.79%
PM (TTM) 5.46%
GM 67.47%
OM growth 3Y14.63%
OM growth 5Y-11.52%
PM growth 3YN/A
PM growth 5Y24.01%
GM growth 3Y-1.23%
GM growth 5Y-1.96%
CARS Yearly Profit, Operating, Gross MarginsCARS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50 -50 -100

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4

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CARS is destroying value.
CARS has less shares outstanding than it did 1 year ago.
CARS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, CARS has an improved debt to assets ratio.
CARS Yearly Shares OutstandingCARS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M
CARS Yearly Total Debt VS Total AssetsCARS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

2.2 Solvency

Based on the Altman-Z score of 0.70, we must say that CARS is in the distress zone and has some risk of bankruptcy.
CARS has a Altman-Z score of 0.70. This is in the lower half of the industry: CARS underperforms 60.61% of its industry peers.
The Debt to FCF ratio of CARS is 2.82, which is a good value as it means it would take CARS, 2.82 years of fcf income to pay off all of its debts.
CARS has a better Debt to FCF ratio (2.82) than 71.21% of its industry peers.
CARS has a Debt/Equity ratio of 0.93. This is a neutral value indicating CARS is somewhat dependend on debt financing.
CARS's Debt to Equity ratio of 0.93 is on the low side compared to the rest of the industry. CARS is outperformed by 75.76% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.93
Debt/FCF 2.82
Altman-Z 0.7
ROIC/WACC0.44
WACC8.36%
CARS Yearly LT Debt VS Equity VS FCFCARS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2.3 Liquidity

A Current Ratio of 1.79 indicates that CARS should not have too much problems paying its short term obligations.
CARS has a Current ratio of 1.79. This is comparable to the rest of the industry: CARS outperforms 43.94% of its industry peers.
CARS has a Quick Ratio of 1.79. This is a normal value and indicates that CARS is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.79, CARS perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.79
Quick Ratio 1.79
CARS Yearly Current Assets VS Current LiabilitesCARS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M

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4

3. Growth

3.1 Past

The earnings per share for CARS have decreased strongly by -67.05% in the last year.
The Earnings Per Share has been growing by 22.78% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 5.98% in the past year.
Measured over the past years, CARS shows a small growth in Revenue. The Revenue has been growing by 0.81% on average per year.
EPS 1Y (TTM)-67.05%
EPS 3Y18.87%
EPS 5Y22.78%
EPS Q2Q%300%
Revenue 1Y (TTM)5.98%
Revenue growth 3Y7.97%
Revenue growth 5Y0.81%
Sales Q2Q%3.05%

3.2 Future

CARS is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -22.40% yearly.
The Revenue is expected to grow by 4.20% on average over the next years.
EPS Next Y-64.86%
EPS Next 2Y-41.32%
EPS Next 3Y-22.4%
EPS Next 5YN/A
Revenue Next Year4.99%
Revenue Next 2Y4.88%
Revenue Next 3Y5.16%
Revenue Next 5Y4.2%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
CARS Yearly Revenue VS EstimatesCARS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 200M 400M 600M 800M
CARS Yearly EPS VS EstimatesCARS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0.5 1 1.5

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4

4. Valuation

4.1 Price/Earnings Ratio

CARS is valuated quite expensively with a Price/Earnings ratio of 27.40.
62.12% of the companies in the same industry are more expensive than CARS, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of CARS to the average of the S&P500 Index (29.63), we can say CARS is valued inline with the index average.
With a Price/Forward Earnings ratio of 26.68, CARS can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CARS is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of CARS to the average of the S&P500 Index (22.68), we can say CARS is valued inline with the index average.
Industry RankSector Rank
PE 27.4
Fwd PE 26.68
CARS Price Earnings VS Forward Price EarningsCARS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CARS indicates a rather cheap valuation: CARS is cheaper than 83.33% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CARS is valued cheaply inside the industry as 95.45% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 6.23
EV/EBITDA 9.4
CARS Per share dataCARS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10

4.3 Compensation for Growth

A cheap valuation may be justified as CARS's earnings are expected to decrease with -22.40% in the coming years.
PEG (NY)N/A
PEG (5Y)1.2
EPS Next 2Y-41.32%
EPS Next 3Y-22.4%

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0

5. Dividend

5.1 Amount

CARS does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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CARS.COM INC

NYSE:CARS (2/21/2025, 8:05:14 PM)

After market: 15.89 0 (0%)

15.89

-0.62 (-3.76%)

Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryInteractive Media & Services
Earnings (Last)11-07 2024-11-07/bmo
Earnings (Next)02-27 2025-02-27/bmo
Inst Owners93.95%
Inst Owner Change1.63%
Ins Owners2.65%
Ins Owner Change-4.08%
Market Cap1.03B
Analysts78.46
Price Target22.73 (43.05%)
Short Float %2.86%
Short Ratio3.69
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)229.68%
Min EPS beat(2)60.26%
Max EPS beat(2)399.11%
EPS beat(4)2
Avg EPS beat(4)86.01%
Min EPS beat(4)-88.86%
Max EPS beat(4)399.11%
EPS beat(8)5
Avg EPS beat(8)217.44%
EPS beat(12)6
Avg EPS beat(12)131.2%
EPS beat(16)9
Avg EPS beat(16)96.31%
Revenue beat(2)0
Avg Revenue beat(2)-2.88%
Min Revenue beat(2)-3.69%
Max Revenue beat(2)-2.08%
Revenue beat(4)0
Avg Revenue beat(4)-2.16%
Min Revenue beat(4)-3.69%
Max Revenue beat(4)-1.3%
Revenue beat(8)0
Avg Revenue beat(8)-1.87%
Revenue beat(12)0
Avg Revenue beat(12)-1.84%
Revenue beat(16)1
Avg Revenue beat(16)-7.72%
PT rev (1m)0%
PT rev (3m)5.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.75%
EPS NY rev (1m)0%
EPS NY rev (3m)38.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.03%
Valuation
Industry RankSector Rank
PE 27.4
Fwd PE 26.68
P/S 1.43
P/FCF 6.23
P/OCF 6.14
P/B 2.05
P/tB N/A
EV/EBITDA 9.4
EPS(TTM)0.58
EY3.65%
EPS(NY)0.6
Fwd EY3.75%
FCF(TTM)2.55
FCFY16.04%
OCF(TTM)2.59
OCFY16.3%
SpS11.1
BVpS7.76
TBVpS-3.84
PEG (NY)N/A
PEG (5Y)1.2
Profitability
Industry RankSector Rank
ROA 3.51%
ROE 7.81%
ROCE 4.84%
ROIC 3.68%
ROICexc 3.87%
ROICexgc 17.96%
OM 6.79%
PM (TTM) 5.46%
GM 67.47%
FCFM 22.97%
ROA(3y)4.28%
ROA(5y)-16.49%
ROE(3y)10.42%
ROE(5y)-47.94%
ROIC(3y)4.61%
ROIC(5y)3.64%
ROICexc(3y)4.8%
ROICexc(5y)3.79%
ROICexgc(3y)46.42%
ROICexgc(5y)43.23%
ROCE(3y)6.06%
ROCE(5y)4.78%
ROICexcg growth 3Y-3.02%
ROICexcg growth 5Y-25.53%
ROICexc growth 3Y20.77%
ROICexc growth 5Y7.1%
OM growth 3Y14.63%
OM growth 5Y-11.52%
PM growth 3YN/A
PM growth 5Y24.01%
GM growth 3Y-1.23%
GM growth 5Y-1.96%
F-Score6
Asset Turnover0.64
Health
Industry RankSector Rank
Debt/Equity 0.93
Debt/FCF 2.82
Debt/EBITDA 2.95
Cap/Depr 2.41%
Cap/Sales 0.37%
Interest Coverage 250
Cash Conversion 106.2%
Profit Quality 420.63%
Current Ratio 1.79
Quick Ratio 1.79
Altman-Z 0.7
F-Score6
WACC8.36%
ROIC/WACC0.44
Cap/Depr(3y)13.66%
Cap/Depr(5y)14.79%
Cap/Sales(3y)2.09%
Cap/Sales(5y)2.57%
Profit Quality(3y)615.64%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-67.05%
EPS 3Y18.87%
EPS 5Y22.78%
EPS Q2Q%300%
EPS Next Y-64.86%
EPS Next 2Y-41.32%
EPS Next 3Y-22.4%
EPS Next 5YN/A
Revenue 1Y (TTM)5.98%
Revenue growth 3Y7.97%
Revenue growth 5Y0.81%
Sales Q2Q%3.05%
Revenue Next Year4.99%
Revenue Next 2Y4.88%
Revenue Next 3Y5.16%
Revenue Next 5Y4.2%
EBIT growth 1Y-19.82%
EBIT growth 3Y23.77%
EBIT growth 5Y-10.81%
EBIT Next Year241.72%
EBIT Next 3Y55.25%
EBIT Next 5Y33.12%
FCF growth 1Y69.42%
FCF growth 3Y3.57%
FCF growth 5Y-1.93%
OCF growth 1Y48.22%
OCF growth 3Y-0.45%
OCF growth 5Y-3.51%