Cars.com (NYSE:CARS) Announces Earnings Results

Key Points

• Cars.com reported quarterly EPS of $0.45, missing analyst expectations of $0.48, while revenue came in at $180.22 million, essentially in line with estimates and up 0.7% year over year.
• On the conference call, management highlighted stronger operating performance, including adjusted EBITDA margin of 28.3%, free cash flow up 42% year over year, and a raised 2026 share repurchase target of $90 million.
• The company is launching a $25 million to $30 million annualized cost-cutting program and expanding AI-focused products, but it still faces near-term pressure from weaker OEM/national ad revenue and mixed dealer/customer trends.

Cars.com (NYSE:CARS - Get Free Report) issued its earnings results on Thursday. The company reported $0.45 EPS for the quarter, missing analysts' consensus estimates of $0.48 by ($0.03), Briefing.com reports. The company had revenue of $180.22 million during the quarter, compared to analyst estimates of $180.16 million. Cars.com had a net margin of 3.73% and a return on equity of 18.12%. The business's revenue was up .7% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.37 earnings per share.

Here are the key takeaways from Cars.com's conference call:

• Cars.com beat expectations in Q1 with $180.2M revenue (up 1% YoY), adjusted EBITDA margin 28.3% (>1 ppt above guidance), free cash flow up 42% YoY, and raised its 2026 share repurchase target to $90M while repurchasing 3.8M shares YTD.
• Management announced and began implementing a cost reduction program targeting $25M–$30M of recurring annualized operating savings to help grow adjusted EBITDA faster than revenue, with partial savings reflected in Q2 guidance.
• Product and AI initiatives are accelerating — MCP integration with ChatGPT, the Conversational Carson assistant (consumers are >4x more likely to submit a lead after interacting), and a new Dealer app — all intended to build an interconnected, AI-first marketplace and improve dealer ROI.
• OEM and national advertising revenue remains pressured (down about $2M YoY in Q1) as some manufacturers reallocated budgets, and management expects Q2 to be a trough with cautious timing for recovery, adding near-term revenue risk.
• Customer metrics are mixed — Marketplace added dealers (+140 YoY) but overall dealer/solutions and website units declined sequentially and AccuTrade subscribers fell as the company de-emphasizes standalone offerings in favor of bundled packages, creating short-term churn and execution risk.

Cars.com Stock Performance

Shares of NYSE CARS traded down $0.65 during midday trading on Friday, reaching $11.68. 1,098,516 shares of the company traded hands, compared to its average volume of 907,628. The company has a market cap of $679.19 million, a price-to-earnings ratio of 27.17 and a beta of 1.64. The stock has a 50-day moving average price of $9.23 and a 200 day moving average price of $10.83. Cars.com has a 52 week low of $7.40 and a 52 week high of $13.97. The company has a debt-to-equity ratio of 0.98, a current ratio of 1.87 and a quick ratio of 1.87.

Analyst Ratings Changes

CARS has been the topic of several recent research reports. BTIG Research raised their price target on Cars.com from $13.00 to $14.00 and gave the stock a "buy" rating in a report on Thursday. Weiss Ratings lowered Cars.com from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Wednesday, April 1st. Barrington Research reiterated an "outperform" rating and issued a $25.00 target price on shares of Cars.com in a research note on Friday, February 27th. B. Riley Financial downgraded shares of Cars.com from a "buy" rating to a "neutral" rating and set a $13.00 price target for the company. in a report on Friday. Finally, JPMorgan Chase & Co. upped their price target on shares of Cars.com from $10.00 to $11.00 and gave the stock a "neutral" rating in a research report on Friday. Three investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus price target of $14.67.

Key Headlines Impacting Cars.com

Here are the key news stories impacting Cars.com this week:

• Positive Sentiment: Cars.com reaffirmed its 2026 outlook for flat to 2% revenue growth and a 29% to 30% adjusted EBITDA margin, while also boosting its share repurchase target to $90 million, signaling confidence in cash generation and capital return. Article link
• Positive Sentiment: Q1 results showed revenue of $180.2 million, adjusted EBITDA of $51.0 million, and an adjusted EBITDA margin of 28.3%, which exceeded guidance and suggests operating performance remains healthy despite modest top-line growth. Article link
• Positive Sentiment: BTIG Research raised its price target on Cars.com to $14 from $13 and kept a Buy rating, indicating some analysts see further upside from current levels. Article link
• Positive Sentiment: JPMorgan also lifted its price target to $11 from $10, even while maintaining a Neutral rating, reflecting improved valuation expectations after the earnings release. Article link
• Neutral Sentiment: Cars.com reported adjusted results that were largely in line with revenue expectations, but the market is balancing that against the earnings miss and modest growth profile. Article link
• Negative Sentiment: The company posted Q1 EPS of $0.45, missing Wall Street estimates of $0.48, which is the main reason shares have moved lower. Article link

Hedge Funds Weigh In On Cars.com

Several large investors have recently bought and sold shares of CARS. Inspire Investing LLC lifted its stake in shares of Cars.com by 3.0% in the 4th quarter. Inspire Investing LLC now owns 38,273 shares of the company's stock worth $467,000 after acquiring an additional 1,119 shares during the period. iSAM Funds UK Ltd increased its stake in shares of Cars.com by 12.3% during the third quarter. iSAM Funds UK Ltd now owns 12,499 shares of the company's stock valued at $153,000 after acquiring an additional 1,367 shares during the period. Vident Advisory LLC raised its holdings in Cars.com by 3.3% during the third quarter. Vident Advisory LLC now owns 43,023 shares of the company's stock worth $526,000 after purchasing an additional 1,386 shares in the last quarter. BNP Paribas Financial Markets raised its holdings in Cars.com by 30.0% during the second quarter. BNP Paribas Financial Markets now owns 7,025 shares of the company's stock worth $83,000 after purchasing an additional 1,623 shares in the last quarter. Finally, State of Tennessee Department of Treasury lifted its position in Cars.com by 5.3% in the fourth quarter. State of Tennessee Department of Treasury now owns 36,904 shares of the company's stock worth $419,000 after purchasing an additional 1,859 shares during the period. Institutional investors and hedge funds own 89.15% of the company's stock.

Cars.com Company Profile

Cars.com operates as a leading online automotive marketplace in the United States, connecting car shoppers with new and used vehicle listings from dealerships and private sellers. The platform enables consumers to research makes and models, compare prices, read expert and user reviews, and access tools such as TrueCost to estimate ownership expenses over time. Through its website and mobile applications, Cars.com aims to simplify the car-buying process by aggregating detailed vehicle data, payment calculators, and dealership ratings into a single user-friendly experience.

On the dealer side, Cars.com provides a suite of marketing and lead-generation services designed to help automotive retailers reach potential buyers and manage their online presence.

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