Online new and used car marketplace Cars.com (NYSE:CARS) will be announcing earnings results tomorrow before the bell. Here's what to look for.
Cars.com met analysts' revenue expectations last quarter, reporting revenues of $180.2 million, up 7.8% year on year. It was a mixed quarter for the company, with slow revenue growth. It reported 19,381 active buyers, up 1% year on year.
Is Cars.com a buy or sell going into earnings? Read our full analysis here, it's free.
This quarter, analysts are expecting Cars.com's revenue to grow 8.1% year on year to $181.8 million, improving from the 3.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.45 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Cars.com has missed Wall Street's revenue estimates twice over the last two years.
Looking at Cars.com's peers in the online marketplace segment, some have already reported their Q2 results, giving us a hint as to what we can expect. MercadoLibre delivered year-on-year revenue growth of 41.5%, beating analysts' expectations by 8.3%, and EverQuote reported revenues up 72.3%, topping estimates by 13.9%. MercadoLibre traded up 10.7% following the results while EverQuote was also up 11.7%.
Read our full analysis of MercadoLibre's results here and EverQuote's results here.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed inflation signals have led to uncertainty around rate cuts, and while some of the online marketplace stocks have fared somewhat better, they have not been spared, with share prices down 7.9% on average over the last month. Cars.com is down 2.8% during the same time and is heading into earnings with an average analyst price target of $23.5 (compared to the current share price of $18.04).
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