Cars.com, Inc. (CARS) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Taboola.com Ltd.

Cargurus, Inc.

Yelp, Inc.

Coursera, Inc.

Upstart Holdings, Inc.

Cars.com, Inc.

MakeMyTrip Ltd.

Getty Images Holdings, Inc.

Perion Network Ltd.

Ziff Davis, Inc.

Shutterstock, Inc.

Why is Cars.com, Inc. ?

Low ability to service debt as the company has a high Debt to EBITDA ratio of 2.95 times

Low ability to service debt as the company has a high Debt to EBITDA ratio of 2.95 times
The company has been able to generate a Return on Capital Employed (avg) of 5.89% signifying low profitability per unit of total capital (equity and debt)

Poor long term growth as Operating profit has grown by an annual rate 37.25% of over the last 5 years

Flat results in Jun 25

OPERATING CASH FLOW(Y) Lowest at USD 139.5 MM
DEBTORS TURNOVER RATIO(HY) Lowest at 5.49 times
NET SALES(Q) Lowest at USD 178.74 MM

With ROCE of 5.17%, it has a expensive valuation with a 1.18 Enterprise value to Capital Employed

The stock is trading at a fair value compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -33.14%, its profits have fallen by -80.4%

Below par performance in long term as well as near term

Along with generating -33.14% returns in the last 1 year, the stock has also underperformed S&P 500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Cars.com, Inc. should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Cars.com, Inc. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Cars.com, Inc.

-8.72%

-0.70

49.78%

S&P 500

25.41%

0.70

20.15%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

5.73%

EBIT Growth (5y)

18.85%

EBIT to Interest (avg)

1.60

Debt to EBITDA (avg)

2.95

Net Debt to Equity (avg)

0.87

Sales to Capital Employed (avg)

0.74

Tax Ratio

24.11%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

5.89%

ROE (avg)

7.06%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

0.99

EV to EBIT

14.34

EV to EBITDA

5.68

EV to Capital Employed

0.99

EV to Sales

1.19

PEG Ratio

Dividend Yield

ROCE (Latest)

6.93%

ROE (Latest)

4.24%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Moving Averages

Mildly Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bullish

Mildly Bearish

OBV

Mildly Bullish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

11What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 162 MM

PRE-TAX PROFIT(Q)

At USD 8.72 MM has Grown at 806.89%

NET PROFIT(Q)

At USD 4.98 MM has Grown at 347.29%

RAW MATERIAL COST(Y)

Fallen by -7.75% (YoY

CASH AND EQV(HY)

Highest at USD 121.83 MM

-8What is not working for the Company

NET PROFIT(9M)

At USD 20.03 MM has Grown at -41.09%

ROCE(HY)

Lowest at 5.69%

DEBTORS TURNOVER RATIO(HY)

Lowest at 5.45 times

OPERATING PROFIT(Q)

Lowest at USD 33.35 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 18.51 %

Here's what is working for Cars.com, Inc.

Pre-Tax Profit

At USD 8.72 MM has Grown at 806.89%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (USD MM)

Net Profit

At USD 4.98 MM has Grown at 347.29%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (USD MM)

Operating Cash Flow

Highest at USD 162 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Cash and Eqv

Highest at USD 121.83 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -7.75% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Cars.com, Inc.

Operating Profit

Lowest at USD 33.35 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (USD MM)

Operating Profit Margin

Lowest at 18.51 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Debtors Turnover Ratio

Lowest at 5.45 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio