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 value. Based on the provided 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 below the peer average of 8.01, suggesting that Cars.com is not generating sufficient earnings relative to its valuation. Additionally, the Price to Book Value of 1.33 indicates a premium over its book value compared to peers like Cargurus, Inc., which has a more favorable valuation.
In comparison to its peers, Cars.com, Inc. is less attractive than Cargurus, Inc., which has a P/E ratio of 22.21 and an EV to EBITDA of 14.11. The company's recent stock performance has been disappointing, with a year-to-date return of -40.28%, significantly underperforming the S&P 500's return of 13.30% during the same period, reinforcing the view that the stock is currently overvalued.