Cars.com (CARS) Q3 Earnings: What To Expect

Max Juang /
2023/11/01 3:07 am EDT

Online new and used car marketplace Cars.com (NYSE:CARS) will be reporting earnings tomorrow before market hours. Here's what you need to know.

Last quarter Cars.com reported revenues of $168.2 million, up 3.26% year on year, missing analyst expectations by 0.53%. It was a weak quarter for the company, with slow revenue growth and a decline in its user base. The company reported 18.8 thousand active buyers, down 3.75% year on year.

Is Cars.com buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Cars.com's revenue to grow 5.08% year on year to $173 million, in line with the 5.14% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.48 per share.

Cars.com Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates three times over the last two years.

Looking at Cars.com's peers in the consumer internet segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Teladoc delivered top-line growth of 7.99% year on year, missing analyst estimates by 0.43% and Shutterstock reported revenues up 14.3% year on year, exceeding estimates by 8.76%. Teladoc traded down 4.3% on the results, and Shutterstock was up 13.8%.

Read our full analysis of Teladoc's results here and Shutterstock's results here.

There has been a stampede out of high valuation technology stocks and while some of the consumer internet stocks have fared somewhat better, they have not been spared, with share price declining 3.56% over the last month. Cars.com is down 7.3% during the same time, and is heading into the earnings with analyst price target of $23.4, compared to share price of $15.2.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.