Is Cars.com, Inc. overvalued or undervalued?

As of 8 August 2024, the valuation grade for Cars.com, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its metrics, particularly with a P/E ratio of 31, which is significantly higher than the peer average of 20.24 for Cars.com, Inc. Additionally, the EV to EBITDA ratio stands at 6.99, while its peers like Cargurus, Inc. show a more attractive ratio of 14.11, further supporting the overvaluation assessment.
In comparison to its peers, Cars.com, Inc. has a Price to Book Value of 1.33 and an EV to Sales ratio of 1.50, which also suggest it is trading at a premium relative to companies like Yelp, Inc. with a P/E of 13.15. The recent stock performance shows that Cars.com, Inc. has underperformed the S&P 500 with a year-to-date return of -21.58% compared to the index's 12.22%, reinforcing the notion that the stock may be overvalued in the current market context.