What Cars.com (CARS) said on its Q3 earnings call. Cars.com (NYSE:CARS) reported higher third-quarter profit and reaffirmed its 2026 outlook, as growth in its core marketplace business helped offset weakness in dealer solutions and advertising revenue. Revenue rose slightly year over year to $181.9 million, while net income more than doubled to $16.3 million, or $0.30 per diluted share, from $7.7 million, or $0.12 per share, a year earlier. Adjusted EBITDA rose 2% to $55.8 million, with a margin of 30.7%, exceeding the high end of the company's guidance by 120 basis points. CEO Tobi Hartmann said marketplace revenue grew 5% year over year in the quarter. The company's focus on that business has helped improve its financial performance, though he cautioned that websites and trade and appraisal products face near-term headwinds as their roadmaps are reshaped. Marketplace growth and a free dealer offering. Cars.com launched a self-service Marketplace Starter package aimed at smaller independent dealers, with no upfront fee. Hartmann said nearly 400 dealers had signed up and approximately 80% of their vehicle inventory was priced below $20,000. More than 60% of eligible signups were fully self-service. Hartmann said the offering is intended to address a gap in affordable inventory and attract dealers to the marketplace. The free package has limits, including on leads, and the company is considering additional services and upgrade options. CFO Sonia Jain said starter-package dealers were not included in the company's third-quarter dealer count and did not affect its average revenue per dealer, or ARPD. Over time, she said, the offering would likely dilute ARPD once a conversion feature is built, but its primary goal is to bring more attractive listings onto the platform. Jain said the company's dealer base is roughly two-thirds franchise dealers and one-third independent dealers, representing an estimated 20% to 25% penetration among independents. Across paid subscriptions and free starter packages, Cars.com added close to 600 independent dealers year over year. Third-quarter ARPD rose 3% to $2,532, driven largely by adoption of higher-tier marketplace subscriptions. Premium+ adoption exceeded 12% of the subscription mix, compared with the company's goal of 15% by year-end. Traffic, AI and website investments. Hartmann said the company's Carson AI shopping assistant surpassed 1 million monthly users during the quarter, nearly double its user base a year earlier. Cars.com is also working on an integration with Muse to surface listings and dealers to more users. Marketplace traffic and visitors fell by a mid-single-digit percentage year over year, a smaller decline than in the first half. Hartmann said the company has prioritized high-intent shoppers and lead conversion over traffic volume, with lead performance rising nearly double digits year over year. Organic traffic also grew. Cars.com plans to add AI-generated vehicle videos and shopper tools, including search, recommendations and vehicle-detail summaries, to Dealer Inspire websites in the fourth quarter. Jain said consolidated dealer count declined year over year because of lower website subscriptions. Hartmann said the company is seeking to stabilize website development and improve its growth outlook in 2027. He also said Cars.com does not view buying and selling vehicles itself as core to its strategy, instead positioning the platform as a partner that facilitates customers' transactions. Costs, capital returns and outlook. Third-quarter operating expenses fell 7% year over year to $153 million. Jain said roughly half the improvement came from lower costs and efficiencies, while the rest reflected lower depreciation and amortization after customer lists tied to the company's 2017 spin-off were fully amortized. Hartmann said organizational and cost-containment efforts generated $30 million to $35 million in discrete annualized operating cost savings. Free cash flow for the first nine months was $97.3 million, up from $94.5 million a year earlier. Cars.com repurchased 7.6 million shares for $74 million through the third quarter and said it remained on pace for its $90 million full-year buyback target. Debt stood at $445 million at September 30, with liquidity of $369.6 million. The company reaffirmed its full-year forecast for revenue growth of flat to 2% and an adjusted EBITDA margin of 29% to 30%. Jain said revenue is expected toward the lower end of the range and the margin toward the higher end. OEM and national revenue fell 3% year over year in the third quarter but rose 15% from the second quarter; Jain said discussions with automakers about 2027 spending have been positive. Hartmann also welcomed Trent Ziegler as the company's new CFO and Mausam Bhatt as chief product officer. Jain will remain for a period to help with the CFO transition, Hartmann said. About Cars.com (NYSE:CARS). Cars.com Inc (NYSE: CARS) operates a digital automotive marketplace that connects consumers with automotive dealers and manufacturers. Its platform enables shoppers to research vehicles, compare listings, read reviews, obtain financing information and connect with sellers when buying new or used cars. The company provides automotive retailers with digital marketing, advertising, inventory merchandising, website and digital retailing solutions, as well as data and analytics tools. Its portfolio includes the Cars.com marketplace and related brands and services focused on dealer reviews, vehicle financing, automotive content and customer engagement. Cars.com primarily serves the United States automotive market, working with consumers, franchised and independent dealerships, original equipment manufacturers and other industry participants.

Cars.com (NYSE:CARS) issues earnings results. Cars.com (NYSE:CARS - Get Free Report) issued its earnings results on Thursday. The company reported $0.58 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.54 by $0.04, FiscalAI reports. The company had revenue of $181.88 million during the quarter, compared to analyst estimates of $183.05 million. Cars.com had a net margin of 4.73% and a return on equity of 18.82%. The company's revenue for the quarter was up .2% on a year-over-year basis. During the same quarter last year, the business posted $0.48 EPS. Here are the key takeaways from Cars.com's conference call: * Marketplace growth strengthened: Marketplace revenue rose 5% year over year, subscribers increased, and ARPD reached another all-time high. Leads were up nearly double digits despite traffic and visitors remaining down mid-single digits. * New products are expanding inventory and engagement: Nearly 400 dealers signed up for the free, self-service Starter package, with about 80% of their inventory priced below $20,000; Carson surpassed 1 million monthly users. Management said Starter is primarily intended to expand relevant inventory, and could be ARPD-dilutive if dealers convert, though it sees future direct and indirect monetization opportunities. * Profitability and shareholder returns were strong: Adjusted EBITDA increased 2% to $55.8 million, with a 30.7% margin above the high end of guidance. Year-to-date free cash flow was $97.3 million, and $74 million of share repurchases put the company on pace for its $90 million full-year target. * 2026 guidance was reaffirmed, with revenue expected near the low end: Cars.com maintained its forecast of 0%-2% revenue growth and a 29%-30% adjusted EBITDA margin, while expecting revenue toward the low end and EBITDA toward the high end of those ranges. * Dealer solutions remain a near-term challenge: Website subscription declines weighed on dealer count, while the company is de-emphasizing AccuTrade as a standalone offering. Management cited near-term headwinds for websites and trade and appraisal, though it expects website improvements to support stabilization and a better growth outlook in 2027. Cars.com stock down 1.2%. CARS traded down $0.16 during midday trading on Friday, hitting $13.40. 1,846,201 shares of the company's stock traded hands, compared to its average volume of 742,004. The company has a debt-to-equity ratio of 1.01, a current ratio of 2.00 and a quick ratio of 2.00. The company has a market cap of $717.09 million, a PE ratio of 17.86 and a beta of 1.66. The stock's fifty day simple moving average is $10.95 and its 200-day simple moving average is $10.60. Cars.com has a one year low of $7.40 and a one year high of $14.02. Analyst upgrades and downgrades. A number of equities analysts have recently weighed in on CARS shares. UBS Group dropped their price target on shares of Cars.com from $13.00 to $11.50 and set a "neutral" rating on the stock in a research note on Wednesday, October 7th. B. Riley Financial lifted their price objective on Cars.com from $13.00 to $15.00 and gave the company a "neutral" rating in a research report on Friday. Zacks Research upgraded Cars.com from a "hold" rating to a "strong-buy" rating in a research note on Friday, October 9th. Weiss Ratings lowered Cars.com from a "hold (c)" rating to a "hold (c-)" rating in a research report on Tuesday, September 29th. Finally, BTIG Research upped their target price on Cars.com from $14.00 to $16.00 and gave the stock a "buy" rating in a research report on Thursday. One analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating and four have given a Hold rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $15.25. Key headlines impacting Cars.com. Here are the key news stories impacting Cars.com this week: * Cars.com reported third-quarter adjusted earnings of $0.58 per share, above the $0.54 analyst consensus and up from $0.48 a year earlier. Net income more than doubled to $16.3 million, while adjusted EBITDA reached $55.8 million and its 30.7% margin exceeded guidance. Marketplace revenue grew 5%. * BTIG Research raised its price target from $14 to $16 and maintained a Buy rating, signaling greater potential upside in its view. * B. Riley lifted its target from $13 to $15, although it kept a Neutral rating. The higher target adds support, but the unchanged rating suggests a measured outlook. * Full-year 2026 revenue guidance of $723.2 million-$737.7 million brackets the $728.7 million consensus; fourth-quarter guidance of $183.9 million-$187.6 million is also close to the $185.6 million estimate. * Quarterly revenue of $181.9 million came in below analysts' $183.1 million estimate and was up just 0.2% year over year. The modest top-line growth may offset some of the earnings and margin strength. Insider activity at Cars.com. In other news, insider Angelique Marks sold 57,980 shares of the stock in a transaction on Monday, August 17th. The shares were sold at an average price of $11.94, for a total transaction of $692,281.20. Following the transaction, the insider owned 149,636 shares in the company, valued at $1,786,653.84. This represents a 27.93% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Director Donald McGovern sold 8,000 shares of the stock in a transaction on Thursday, August 20th. The stock was sold at an average price of $12.25, for a total transaction of $98,000.00. Following the transaction, the director owned 102,900 shares in the company, valued at approximately $1,260,525. This trade represents a 7.21% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders own 3.36% of the company's stock. Cars.com company profile. Cars.com Inc (NYSE: CARS) operates a digital automotive marketplace that connects consumers with automotive dealers and manufacturers. Its platform enables shoppers to research vehicles, compare listings, read reviews, obtain financing information and connect with sellers when buying new or used cars. The company provides automotive retailers with digital marketing, advertising, inventory merchandising, website and digital retailing solutions, as well as data and analytics tools. Its portfolio includes the Cars.com marketplace and related brands and services focused on dealer reviews, vehicle financing, automotive content and customer engagement. Cars.com primarily serves the United States automotive market, working with consumers, franchised and independent dealerships, original equipment manufacturers and other industry participants. Further reading. Receive News & Ratings for Cars.com Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cars.com and related companies with MarketBeat.com's FREE daily email newsletter.