Analyst Estimates: Here's What Brokers Think Of Cars.com Inc. (NYSE:CARS) After Its Full-Year Report

Cars.com Inc. (NYSE:CARS) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to US$17.53 in the week after its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of US$689m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.3% to hit US$1.74 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cars.com after the latest results.

See our latest analysis for Cars.com

Taking into account the latest results, the most recent consensus for Cars.com from seven analysts is for revenues of US$736.2m in 2024. If met, it would imply a satisfactory 6.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to crater 71% to US$0.53 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$735.3m and earnings per share (EPS) of US$0.64 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The consensus price target held steady at US$23.29, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Cars.com, with the most bullish analyst valuing it at US$27.00 and the most bearish at US$17.50 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Cars.com's growth to accelerate, with the forecast 6.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.9% annually. So it's clear that despite the acceleration in growth, Cars.com is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cars.com. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cars.com's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Cars.com going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 4 warning signs for Cars.com you should be aware of, and 2 of them are concerning.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.