Cars.com Inc.
Cars.com Inc. Fundamental Analysis
Cars.com Inc. (CARS) shows weak financial fundamentals with a PE ratio of 22.69, profit margin of 2.77%, and ROE of 4.17%. The company generates $0.7B in annual revenue with moderate year-over-year growth of 4.35%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 33.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CARS's fundamental strength across five key dimensions:
Efficiency Score
WeakCARS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentCARS trades at attractive valuation levels.
Growth Score
WeakCARS faces weak or negative growth trends.
Financial Health Score
ExcellentCARS maintains a strong and stable balance sheet.
Profitability Score
WeakCARS struggles to sustain strong margins.
Key Financial Metrics
Is CARS Expensive or Cheap?
P/E Ratio
CARS trades at 22.69 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, CARS's PEG of -0.71 indicates potential undervaluation.
Price to Book
The market values Cars.com Inc. at 0.96 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 0.25 times EBITDA. This is generally considered low.
How Well Does CARS Make Money?
Net Profit Margin
For every $100 in sales, Cars.com Inc. keeps $2.77 as profit after all expenses.
Operating Margin
Core operations generate 8.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.17 in profit for every $100 of shareholder equity.
ROA
Cars.com Inc. generates $1.89 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Cars.com Inc. produces operating cash flow of $150.52M, showing steady but balanced cash generation.
Free Cash Flow
Cars.com Inc. generates strong free cash flow of $146.27M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.45 in free cash annually.
FCF Yield
CARS converts 32.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.69
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.71
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.96
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.62
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.99
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.87
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.04
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How CARS Stacks Against Its Sector Peers
| Metric | CARS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.69 | 23.49 | Neutral |
| ROE | 4.17% | 1160.00% | Weak |
| Net Margin | 2.77% | 672.00% | Weak |
| Debt/Equity | 0.99 | 0.73 | Weak (High Leverage) |
| Current Ratio | 1.87 | 2.56 | Neutral |
| ROA | 1.89% | -8277.00% (disorted) | Weak |
CARS outperforms its industry in 0 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Cars.com Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
20.31%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
110.98%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
52.55%
Industry Style: Cyclical, Growth, Discretionary
High Growth