NYSE:CARS

Stock Analysis Report

Executive Summary

Cars.com Inc., through its subsidiaries, operates as a digital automotive marketplace that connects car shoppers with sellers and original equipment manufacturers in the United States.


Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Cars.com's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CARS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

15.1%

CARS

2.8%

US Interactive Media and Services

2.0%

US Market


1 Year Return

-48.1%

CARS

33.7%

US Interactive Media and Services

23.6%

US Market

Return vs Industry: CARS underperformed the US Interactive Media and Services industry which returned 33.3% over the past year.

Return vs Market: CARS underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

CARSIndustryMarket
7 Day15.1%2.8%2.0%
30 Day6.2%8.7%3.9%
90 Day24.4%18.1%12.0%
1 Year-48.1%-48.1%33.8%33.7%26.2%23.6%
3 Yearn/a66.1%65.9%53.2%43.3%
5 Yearn/a137.1%136.4%75.7%56.3%

Price Volatility Vs. Market

How volatile is Cars.com's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cars.com undervalued compared to its fair value and its price relative to the market?

42.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CARS ($11.5) is trading below our estimate of fair value ($21.61)

Significantly Below Fair Value: CARS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CARS is unprofitable, so we can't compare its PE Ratio to the Interactive Media and Services industry average.

PE vs Market: CARS is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CARS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CARS is good value based on its PB Ratio (0.7x) compared to the US Interactive Media and Services industry average (2.7x).


Next Steps

Future Growth

How is Cars.com forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

111.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CARS is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: CARS is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CARS's is expected to become profitable in the next 3 years.

Revenue vs Market: CARS's revenue (2.3% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: CARS's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CARS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Cars.com performed over the past 5 years?

3.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CARS is currently unprofitable.

Growing Profit Margin: CARS is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CARS is unprofitable, but has reduced losses over the past 5 years at a rate of 3.1% per year.

Accelerating Growth: Unable to compare CARS's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CARS is unprofitable, making it difficult to compare its past year earnings growth to the Interactive Media and Services industry (15.9%).


Return on Equity

High ROE: CARS has a negative Return on Equity (-37.83%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cars.com's financial position?


Financial Position Analysis

Short Term Liabilities: CARS's short term assets ($129.6M) exceed its short term liabilities ($121.8M).

Long Term Liabilities: CARS's short term assets ($129.6M) do not cover its long term liabilities ($796.6M).


Debt to Equity History and Analysis

Debt Level: CARS's debt to equity ratio (59.2%) is considered high.

Reducing Debt: Insufficient data to determine if CARS's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CARS's debt is not well covered by operating cash flow (18.2%).

Interest Coverage: CARS is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: CARS has a low level of unsold assets or inventory.

Debt Coverage by Assets: CARS's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Cars.com's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage0.4%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate CARS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CARS's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CARS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CARS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CARS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Cars.com's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

T. Vetter (48yo)

5.2yrs

Tenure

US$4,986,458

Compensation

Mr. T. Alex Vetter co-founded Cars.com Inc. in 1997 and has been its Chief Executive Officer and President since November 2014. Mr. Vetter served as the Chief Operating Officer and Executive Vice President ...


CEO Compensation Analysis

Compensation vs Market: T.'s total compensation ($USD4.99M) is above average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: T.'s compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.2yrs

Average Tenure

48yo

Average Age

Experienced Management: CARS's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

2.6yrs

Average Tenure

55.5yo

Average Age

Experienced Board: CARS's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$105,38012 Sep 19
T. Vetter
EntityIndividual
Role
Chief Executive Officer
Co-Founder
Shares11,000
Max PriceUS$9.58
BuyUS$95,70413 Aug 19
Donald McGovern
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,448
Max PriceUS$9.16
BuyUS$99,67813 Aug 19
Scott Forbes
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares11,100
Max PriceUS$8.98
BuyUS$95,90012 Aug 19
Jill Greenthal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$9.59
BuyUS$46,15009 Aug 19
Becky Sheehan
EntityIndividual
Shares5,000
Max PriceUS$9.23
BuyUS$28,68009 Aug 19
Bryan Wiener
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$9.56
BuyUS$49,67008 Aug 19
Thomas Hale
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,913
Max PriceUS$10.11
BuyUS$50,75008 Aug 19
Greg Revelle
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$10.15
SellUS$50,530,42707 Aug 19
Starboard Value LP
EntityCompany
Shares4,474,858
Max PriceUS$11.71
BuyUS$24,85007 Aug 19
Michael Kelly
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$9.94
BuyUS$99,90007 Aug 19
James Rogers
EntityIndividual
Role
Chief Legal Officer
Chief Legal Officer
Shares10,000
Max PriceUS$9.99
BuyUS$203,80007 Aug 19
T. Vetter
EntityIndividual
Role
Chief Executive Officer
Co-Founder
Shares20,000
Max PriceUS$10.19

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Mitch Golub

    Co-Founder

    • Tenure: 23yrs
  • T. Vetter (48yo)

    Co-Founder

    • Tenure: 5.2yrs
    • Compensation: US$4.99m
  • Bill Swislow

    Co-Founder

    • Tenure: 23yrs
  • Doug Miller (48yo)

    Chief Revenue Officer

    • Tenure: 1.5yrs
    • Compensation: US$803.16k
  • Fred Lee (45yo)

    Chief Technology Officer

    • Tenure: 1.7yrs
  • Jim Rogers (66yo)

    Chief Legal Officer

    • Tenure: 3.3yrs
    • Compensation: US$1.06m
  • Andy Jacobson

    Senior Vice President of National Sales

    • Tenure: 2.3yrs
  • Brooke Skinner Ricketts (38yo)

    Chief Marketing Officer

    • Tenure: 3.2yrs
  • Jandy Tomy

    Interim CFO

    • D.V. Williams

      Chief People Officer

      • Tenure: 1yrs

    Board Members

    • Scott Forbes (61yo)

      Independent Chairman of the Board

      • Tenure: 2.7yrs
      • Compensation: US$320.01k
    • Jill Greenthal (62yo)

      Independent Director

      • Tenure: 2.7yrs
      • Compensation: US$245.01k
    • Mike Kelly (61yo)

      Independent Director

      • Tenure: 1.7yrs
      • Compensation: US$196.89k
    • Bryan Wiener (49yo)

      Independent Director

      • Tenure: 1.7yrs
      • Compensation: US$196.89k
    • Jerri DeVard (61yo)

      Independent Director

      • Tenure: 2.7yrs
      • Compensation: US$225.01k
    • Tom Hale (50yo)

      Independent Director

      • Tenure: 2.6yrs
      • Compensation: US$225.01k
    • T. Vetter (48yo)

      Co-Founder

      • Tenure: 5.2yrs
      • Compensation: US$4.99m
    • Don McGovern (68yo)

      Independent Director

      • Tenure: 2.6yrs
      • Compensation: US$245.01k
    • Greg Revelle (41yo)

      Independent Director

      • Tenure: 2.6yrs
      • Compensation: US$225.01k
    • Bala Subramanian (47yo)

      Independent Director

      • Tenure: 2yrs
      • Compensation: US$281.27k

    Company Information

    Cars.com Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Cars.com Inc.
    • Ticker: CARS
    • Exchange: NYSE
    • Founded: 1998
    • Industry: Interactive Media and Services
    • Sector: Media
    • Market Cap: US$865.238m
    • Shares outstanding: 66.76m
    • Website: https://www.cars.com

    Number of Employees


    Location

    • Cars.com Inc.
    • 300 South Riverside Plaza
    • Suite 1000
    • Chicago
    • Illinois
    • 60606
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    CARSNYSE (New York Stock Exchange)YesCommon StockUSUSDMay 2017
    CK3DB (Deutsche Boerse AG)YesCommon StockDEEURMay 2017
    0HTZLSE (London Stock Exchange)YesCommon StockGBUSDMay 2017

    Biography

    Cars.com Inc., through its subsidiaries, operates as a digital automotive marketplace that connects car shoppers with sellers and original equipment manufacturers in the United States. Its Cars.com platform consists of Website and mobile application, including a database of approximately 5 million new and used vehicle listings from U.S.-based dealerships and online-only car sellers. The company’s portfolio of brands also includes Dealer Inspire, DealerRater, Auto.com, PickupTrucks.com, and NewCars.com, which provide digital solutions for car dealers, including dealer Websites, technology and reputation management solutions that improve automotive selling for local dealerships and national OEM brands. In addition, it offers a monthly online subscription that enables dealers to showcase their new and used vehicle inventory to in-market shoppers with photos, videos, and vehicle specifications. As of December 31, 2018, it served approximately 20,000 dealer customers, including franchise dealers and independent dealers. Cars.com Inc. was founded in 1998 and is headquartered in Chicago, Illinois. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/19 00:45
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.