Cars.com (NYSE:CARS) Posts Quarterly Earnings Results, Misses Estimates By $0.12 EPS

Cars.com (NYSE:CARS) announced its quarterly earnings data on Thursday. The company reported $0.44 EPS for the quarter, missing analysts’ consensus estimates of $0.56 by ($0.12), FiscalAI reports. Cars.com had a net margin of 2.77% and a return on equity of 17.21%. The company had revenue of $183.90 million for the quarter, compared to analyst estimates of $183.44 million. During the same period in the prior year, the company posted $0.49 EPS. The firm’s quarterly revenue was up 1.9% on a year-over-year basis.

Here are the key takeaways from Cars.com’s conference call:

• New CEO Toby Hartmann is refocusing Cars.com on an integrated marketplace flywheel—prioritizing product integration, process and cost optimization, and organizational changes to lift growth above low single digits in the short-to-medium term.
• Full-year 2025 revenue was $723 million (up 1%) with Q4 revenue of $183.9 million (+2%), Adjusted EBITDA margin around 29.2%, and free cash flow of $125.7 million; the company repurchased $86 million of shares (≈9% of float) in 2025.
• Dealer-facing products showed traction: dealer count rose to 19,544 (+338 YoY) with Marketplace adding 100+ dealers sequentially for the third straight quarter, Premium+ subscribers more than doubled, and AccuTrade adoption (≈1,180 customers) plus the new AccuTrade IMS and AI features (Carson, VIN videos) drove higher engagement.
• OEM and national advertising remained soft (roughly a $1.5M YoY decline in Q4), and Cars.com guided 2026 revenue to be flat to +2% with Q1 revenue flat to +1% and Q1 Adjusted EBITDA margin pressured to 26–27% partly due to DealerClub-related losses.
• Management expects to free up cost savings to reinvest in marketplace initiatives while maintaining capital returns—targeting at least $60 million of share buybacks in 2026 and beginning to pay down revolver debt from a net leverage of ~1.9x and liquidity of $351M.

Cars.com Stock Down 5.6%

Shares of NYSE:CARS opened at $8.58 on Friday. The company’s fifty day moving average is $11.65 and its 200-day moving average is $11.92. The company has a debt-to-equity ratio of 0.94, a quick ratio of 1.82 and a current ratio of 1.82. Cars.com has a 52 week low of $8.29 and a 52 week high of $13.97. The company has a market capitalization of $512.87 million, a PE ratio of 26.80 and a beta of 1.46.

Cars.com News Summary

Here are the key news stories impacting Cars.com this week:

• Positive Sentiment: Record full-year revenue, cash generation and buybacks: Cars.com reported record 2025 revenue of $723M, generated $152M of annual cash from operations and repurchased 7.1M shares for ~$86M (retiring ~9% of shares), which supports shareholder return and balance-sheet flexibility. PR Newswire: Cars.com Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: Bullish analyst with large upside: Barrington Research reaffirmed an “outperform” rating and set a $25 price target, signaling a sizable upside scenario if Cars.com executes on dealer monetization and product integration. Benzinga
• Positive Sentiment: BTIG keeps a buy stance despite trimming its target: BTIG lowered its price target from $17 to $13 but retained a “buy” call, indicating some analysts still see recovery potential above current levels. TickerReport: BTIG Research
• Neutral Sentiment: Company product roadmap / marketplace integration and AI plans: Management outlined marketplace integration and plans to advance AI-powered solutions with an expectation of dealer revenue growth in 2026 — constructive for long-term monetization but not immediate upside. Earnings Call Transcript | Slide Deck | MSN
• Neutral Sentiment: JPMorgan keeps a neutral view but trims target: JPMorgan reaffirmed a “neutral” rating and cut its price target to $10 (from $16), reflecting reduced near-term confidence even as upside remains modest against today’s price. Benzinga / Finviz
• Negative Sentiment: Q4 earnings miss and weak guidance: Cars.com reported Q4 EPS $0.44 vs. $0.56 expected and issued FY26 revenue guidance implying only ~0%–2% y/y growth (FY revenue guidance below consensus), which drove investor disappointment and downward pressure on the stock. Press Release / Slide Deck
• Negative Sentiment: Structural concerns and traffic decline: A Seeking Alpha note argues Cars.com faces declining consumer traffic, stagnant dealer growth, margin pressure and a ~$400M net debt load — a thesis that supports continued downside risk and a “Sell” view. Seeking Alpha: Cars.com — A Struggling Business
• Negative Sentiment: Multiple outlets highlight the miss: Coverage from Zacks, MarketBeat and other outlets emphasize the EPS miss and flat revenue growth, reinforcing the negative narrative among investors. Zacks | MarketBeat

Insider Activity

In other news, CFO Sonia Jain sold 11,400 shares of the firm’s stock in a transaction that occurred on Wednesday, December 17th. The shares were sold at an average price of $13.45, for a total transaction of $153,330.00. Following the completion of the sale, the chief financial officer owned 243,642 shares of the company’s stock, valued at approximately $3,276,984.90. This trade represents a 4.47% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, insider Matthew B. Crawford sold 27,358 shares of Cars.com stock in a transaction that occurred on Tuesday, December 2nd. The shares were sold at an average price of $12.03, for a total transaction of $329,116.74. Following the completion of the transaction, the insider owned 71,103 shares of the company’s stock, valued at $855,369.09. This trade represents a 27.79% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 2.39% of the company’s stock.

Hedge Funds Weigh In On Cars.com

A number of institutional investors have recently modified their holdings of the stock. Inspire Investing LLC grew its stake in shares of Cars.com by 3.0% during the fourth quarter. Inspire Investing LLC now owns 38,273 shares of the company’s stock valued at $467,000 after purchasing an additional 1,119 shares during the last quarter. iSAM Funds UK Ltd boosted its position in Cars.com by 12.3% in the 3rd quarter. iSAM Funds UK Ltd now owns 12,499 shares of the company’s stock valued at $153,000 after buying an additional 1,367 shares during the last quarter. Vident Advisory LLC increased its stake in shares of Cars.com by 3.3% in the 3rd quarter. Vident Advisory LLC now owns 43,023 shares of the company’s stock valued at $526,000 after buying an additional 1,386 shares during the period. BNP Paribas Financial Markets raised its position in shares of Cars.com by 30.0% during the second quarter. BNP Paribas Financial Markets now owns 7,025 shares of the company’s stock worth $83,000 after acquiring an additional 1,623 shares during the last quarter. Finally, State of Tennessee Department of Treasury lifted its stake in shares of Cars.com by 5.3% during the fourth quarter. State of Tennessee Department of Treasury now owns 36,904 shares of the company’s stock valued at $419,000 after acquiring an additional 1,859 shares during the period. 89.15% of the stock is owned by institutional investors.

Wall Street Analysts Forecast Growth

A number of analysts have commented on CARS shares. UBS Group raised their price objective on Cars.com from $12.00 to $13.00 and gave the stock a “neutral” rating in a research report on Wednesday, January 14th. DA Davidson restated a “buy” rating and issued a $13.50 target price on shares of Cars.com in a research note on Tuesday, November 18th. BTIG Research decreased their price target on shares of Cars.com from $17.00 to $13.00 and set a “buy” rating on the stock in a research note on Thursday. Wall Street Zen upgraded shares of Cars.com from a “hold” rating to a “buy” rating in a research note on Saturday, November 8th. Finally, Weiss Ratings reiterated a “hold (c-)” rating on shares of Cars.com in a research report on Tuesday, January 27th. Four equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of $16.08.

Cars.com Company Profile

Cars.com operates as a leading online automotive marketplace in the United States, connecting car shoppers with new and used vehicle listings from dealerships and private sellers. The platform enables consumers to research makes and models, compare prices, read expert and user reviews, and access tools such as TrueCost to estimate ownership expenses over time. Through its website and mobile applications, Cars.com aims to simplify the car-buying process by aggregating detailed vehicle data, payment calculators, and dealership ratings into a single user-friendly experience.

On the dealer side, Cars.com provides a suite of marketing and lead-generation services designed to help automotive retailers reach potential buyers and manage their online presence.