Cars.com expects Q3 revenue to be flat to up 2% year-over-year
Company sees Q3 adjusted EBITDA margin between 28.5% and 29.5%
Cars.com reaffirms 2026 revenue guidance of flat to up 2% year-over-year
Overview
US auto marketplace's Q2 revenue up 1% yr/yr, slightly missing analyst expectations
Adjusted EPS for Q2 beat analyst expectations, driven by improved operating income
Company repurchased 3.7 mln shares for $37 mln in Q2 as part of buyback program
Result drivers
Marketplace growth - Marketplace revenue grew over 7% yr/yr, the fastest quarterly growth rate since 2021, offsetting declines in OEM revenue
Cost reductions - Lower operating expenses, driven by reduced depreciation and amortization and cost reduction activities, improved operating leverage and profitability
New product launches - Introduction of features like Dealer Verified Listings and enhanced audience targeting supported dealer revenue and value delivery
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for Cars.com Inc is $13.50, about 14% above its August 5 closing price of $11.84
The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 13 three months ago
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