Cars.com Q3 profit beats on cost controls, subscription growth
Overview
US auto marketplace's Q3 revenue rose slightly yr/yr, slightly missing analyst expectations
Adjusted EPS for Q3 beat analyst expectations
Company repurchased 1.4 mln shares for $16 mln in Q3
Outlook
Cars.com reaffirms 2026 revenue guidance as flat to up 2% year-over-year
Company expects 2026 adjusted EBITDA margin between 29.0% and 30.0%
Company sees pressure in Dealer and OEM media products amid current market conditions
Result Drivers
MARKETPLACE SUBSCRIPTIONS - Co said revenue growth was driven by increased customer count and higher adoption of Premium+ subscriptions
NEW DEALER OFFERING - Launch of self-service Marketplace Starter package contributed to listings growth, targeting independent dealers
COST MANAGEMENT - Lower operating expenses due to cost controls and efficiency improvements supported profitability
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Slight Miss* | $181.90 mln | $182.90 mln (6 Analysts) |
Q3 Adjusted EPS | Beat | $0.58 | $0.25 (4 Analysts) |
Q3 Net Income | $16.30 mln | ||
Q3 Adjusted EBITDA | $55.80 mln | ||
Q3 Operating Expenses | $153 mln |
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for Cars.com Inc is $13.00, about 2% above its November 4 closing price of $12.75
The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago
Reuters Recommended Reads
Nov 4 - Zillow Q3 revenue rises 7% despite weak housing market
Nov 4 - Germany's Auto1 Group misses Q3 revenue estimates
Nov 4 - China's Autohome Q3 revenue falls 26% on lower ad and dealer spending
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)