CARS.COM INC.

Recommendation history

• Q3 2025HoldCars.com delivered a solid execution quarter, but not yet a clear growth reacceleration: revenue rose 1% year over year to $181.6 million, adjusted EBITDA increased 7% to $55 million, and margin reached 30.1%. Dealer additions, repackaging and AI engagement support the bull case, but OEM/National revenue fell 5% and management acknowledged that reaching the high end of its outlook depends on a rebound in discretionary media spending; stance: hold.
• Q2 2025HoldHold: Q2 revenue was $178.7 million, flat year over year, while adjusted EBITDA rose slightly to $51 million and margin reached 28.5%. Dealer additions, AI search, AccuTrade, repackaging and buybacks support a second-half recovery, but the investment case still depends on unproven ARPD expansion and low-single-digit H2 growth amid uncertain OEM and dealer advertising demand.
• Q3 2024HoldHold: Cars.com delivered solid execution, with Q3 revenue up 3% to $180 million, adjusted EBITDA up 3% to $51 million and a 28.5% margin, while OEM/National revenue accelerated 17% to $17 million. Product adoption—especially AccuTrade, websites and VIN Performance Media—supports the bull case, but dealer customers fell 135 sequentially to 19,255 and dealer revenue grew only 2%; management’s recovery case rests heavily on an unquantified October rebound amid dealer budget pressure and lumpy OEM spending.
• Q2 2024HoldHold: Q2 revenue rose 6% to $179 million and adjusted EBITDA increased 10% to $50 million, with $56 million of year-to-date free cash flow. However, FY2024 revenue-growth guidance was reduced to 4.5%-5% as AccuTrade adoption stalled and the CDK outage delayed sales; the revised strategy lowers near-term monetization and pushes the fuller ramp into 2025.
• Q1 2024HoldHold: Cars.com delivered a solid Q1, with revenue up 8% to slightly above $180 million, adjusted EBITDA of $53 million and a 29.2% margin, while reaffirming 2024 revenue growth of 6%-8% and EBITDA margin of 28%-30%. The platform and OEM recovery are improving, but Q1 dealer attrition, an expected Q2 margin step-down to 27.5%-29.5%, and limited evidence on Accu-Trade conversion keep the setup from being a clean buy.
• Q4 2023HoldHold: Cars.com delivered a solid Q4—revenue rose 7% to $180 million, adjusted EBITDA reached $55 million at a 31% margin, and full-year free cash flow was $116 million—but 2024 guidance of 6%-8% revenue growth does not yet justify an aggressive buy. The platform strategy and ARPD growth are encouraging, yet dealer churn, limited expected traffic growth, and management’s admission that the FordDirect endorsement is validation rather than a near-term windfall keep the risk/reward balanced.
• Q1 2023HoldHold: Cars.com delivered solid Q1 execution, with revenue up 6% to $167 million, adjusted EBITDA of $44 million and a 26.5% margin, supported by 11% traffic growth, 4% ARPD growth and Accu-Trade adoption. However, the 3%-6% FY2023 revenue-growth outlook remains modest, OEM/National revenue fell 11%, dealer customers declined to 19,186, and Dealer Inspire faced competitive churn—leaving insufficient evidence for a clean buy despite improving leverage.