Cars.com (NYSE:CARS) Releases Quarterly Earnings Results, Beats Expectations By $0.04 EPS

Key Points

• Cars.com beat earnings expectations: Quarterly EPS was $0.58, $0.04 above consensus and up from $0.48 a year earlier.
• Revenue was slightly below estimates: Revenue of $181.9 million missed the $183.1 million forecast and increased just 0.2% year over year, although marketplace revenue grew 5%.
• Profitability was strong, but the outlook remains measured: Adjusted EBITDA rose 2% to $55.8 million with a 30.7% margin; management reaffirmed 2026 guidance while expecting revenue near the low end of its range.

Cars.com (NYSE:CARS - Get Free Report) released its quarterly earnings data on Thursday. The company reported $0.58 earnings per share for the quarter, topping the consensus estimate of $0.54 by $0.04, FiscalAI reports. The business had revenue of $181.88 million during the quarter, compared to analyst estimates of $183.05 million. Cars.com had a return on equity of 18.82% and a net margin of 4.73%. The company's revenue was up .2% compared to the same quarter last year. During the same period last year, the company posted $0.48 EPS.

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

• Marketplace growth strengthened: Marketplace revenue rose 5% year over year, subscribers increased, and ARPD reached another all-time high. Leads were up nearly double digits despite traffic and visitors remaining down mid-single digits.
• New products are expanding inventory and engagement: Nearly 400 dealers signed up for the free, self-service Starter package, with about 80% of their inventory priced below $20,000; Carson surpassed 1 million monthly users. Management said Starter is primarily intended to expand relevant inventory, and could be ARPD-dilutive if dealers convert, though it sees future direct and indirect monetization opportunities.
• Profitability and shareholder returns were strong: Adjusted EBITDA increased 2% to $55.8 million, with a 30.7% margin above the high end of guidance. Year-to-date free cash flow was $97.3 million, and $74 million of share repurchases put the company on pace for its $90 million full-year target.
• 2026 guidance was reaffirmed, with revenue expected near the low end: Cars.com maintained its forecast of 0%–2% revenue growth and a 29%–30% adjusted EBITDA margin, while expecting revenue toward the low end and EBITDA toward the high end of those ranges.
• Dealer solutions remain a near-term challenge: Website subscription declines weighed on dealer count, while the company is de-emphasizing AccuTrade as a standalone offering. Management cited near-term headwinds for websites and trade and appraisal, though it expects website improvements to support stabilization and a better growth outlook in 2027.

Cars.com Stock Down 1.2%

NYSE:CARS traded down $0.16 during trading hours on Friday, hitting $13.40. 1,846,201 shares of the stock traded hands, compared to its average volume of 742,004. The firm has a 50 day moving average price of $10.95 and a 200 day moving average price of $10.60. The company has a current ratio of 2.00, a quick ratio of 2.00 and a debt-to-equity ratio of 1.01. Cars.com has a fifty-two week low of $7.40 and a fifty-two week high of $14.02. The firm has a market cap of $717.09 million, a price-to-earnings ratio of 17.86 and a beta of 1.66.

Cars.com News Roundup

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

• Positive Sentiment: Cars.com reported third-quarter adjusted earnings of $0.58 per share, above the $0.54 analyst consensus and up from $0.48 a year earlier. Net income more than doubled to $16.3 million, while adjusted EBITDA reached $55.8 million and its 30.7% margin exceeded guidance. Marketplace revenue grew 5%. Cars.com third-quarter results
• Positive Sentiment: BTIG Research raised its price target from $14 to $16 and maintained a Buy rating, signaling greater potential upside in its view.
• Positive Sentiment: B. Riley lifted its target from $13 to $15, although it kept a Neutral rating. The higher target adds support, but the unchanged rating suggests a measured outlook.
• Neutral Sentiment: Full-year 2026 revenue guidance of $723.2 million–$737.7 million brackets the $728.7 million consensus; fourth-quarter guidance of $183.9 million–$187.6 million is also close to the $185.6 million estimate. Cars.com guidance and results
• Negative Sentiment: Quarterly revenue of $181.9 million came in below analysts’ $183.1 million estimate and was up just 0.2% year over year. The modest top-line growth may offset some of the earnings and margin strength. Cars.com misses Q3 revenue estimates

Insiders Place Their Bets

In other news, insider Angelique Marks sold 57,980 shares of Cars.com stock in a transaction on Monday, August 17th. The stock was sold at an average price of $11.94, for a total transaction of $692,281.20. Following the transaction, the insider owned 149,636 shares in the company, valued at approximately $1,786,653.84. The trade was a 27.93% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, Director Jr. Donald A. Mcgovern sold 8,000 shares of Cars.com stock in a transaction on Thursday, August 20th. The shares were sold at an average price of $12.25, for a total value of $98,000.00. Following the transaction, the director owned 102,900 shares in the company, valued at $1,260,525. This represents a 7.21% decrease in their position. The SEC filing for this sale provides additional information. 3.36% of the stock is owned by corporate insiders.

Analyst Upgrades and Downgrades

Several brokerages have recently commented on CARS. UBS Group reduced their target price on Cars.com from $13.00 to $11.50 and set a "neutral" rating for the company in a report on Wednesday, October 7th. BTIG Research lifted their price target on Cars.com from $14.00 to $16.00 and gave the stock a "buy" rating in a research note on Thursday. Zacks Research raised Cars.com from a "hold" rating to a "strong-buy" rating in a research note on Friday, October 9th. Weiss Ratings downgraded Cars.com from a "hold (c)" rating to a "hold (c-)" rating in a report on Tuesday, September 29th. Finally, B. Riley Financial upped their price objective on shares of Cars.com from $13.00 to $15.00 and gave the company a "neutral" rating in a research note on Friday. One research analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating and four have given a Hold rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average price target of $15.25.

Cars.com Company Profile

Cars.com Inc NYSE: CARS operates a digital automotive marketplace that connects consumers with automotive dealers and manufacturers. Its platform enables shoppers to research vehicles, compare listings, read reviews, obtain financing information and connect with sellers when buying new or used cars.

The company provides automotive retailers with digital marketing, advertising, inventory merchandising, website and digital retailing solutions, as well as data and analytics tools. Its portfolio includes the Cars.com marketplace and related brands and services focused on dealer reviews, vehicle financing, automotive content and customer engagement.

Cars.com primarily serves the United States automotive market, working with consumers, franchised and independent dealerships, original equipment manufacturers and other industry participants.

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