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Cars.com Q3 profit beats on cost controls, subscription growth

By Reuters News


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


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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