Is Cars.com, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Cars.com, Inc. has moved from attractive to fair, indicating a shift in its perceived investment quality. Based on the current metrics, the company appears to be overvalued. The P/E ratio stands at 31, significantly higher than the peer average of 20.24 for Cars.com, while the EV to EBITDA ratio of 6.99 is also elevated compared to peers like Cargurus, Inc. which has a ratio of 14.11. Additionally, the Price to Book Value is 1.33, suggesting that the stock may not be adequately priced relative to its book value.
In terms of peer comparison, Cars.com, Inc. is less favorable than Cargurus, Inc. which is rated attractive with a P/E of 22.21, and Yelp, Inc. which also holds an attractive rating with a P/E of 13.15. The recent stock performance has been poor, with a year-to-date return of -40.28%, compared to a positive return of 13.30% for the S&P 500, further reinforcing the notion that the stock is overvalued in the current market context.