Cars (CARS – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Gary Prestopino from Barrington maintained a Buy rating on the stock and has a $25.00 price target.
Gary Prestopino has given his Buy rating due to a combination of factors including Cars.com’s stronger than expected performance in the fourth quarter of 2023 and their alignment with industry fundamentals for the coming year. The company outpaced both the analyst’s expectations and the consensus estimates for revenue and adjusted EBITDA. Furthermore, Cars.com reported an impressive year-over-year revenue growth, notably in the dealer segment, and a solid increase in their adjusted EBITDA margin. These financial metrics underscore the company’s robust financial health and its potential for sustained growth.
Additionally, strategic initiatives have positioned Cars.com favorably in the marketplace. The company has made significant investments in both consumer and dealer innovations which are expected to drive future growth. For instance, the introduction of new marketplace subscription packages has seen a majority of customers opting for higher tier packages, which bodes well for revenue and adjusted EBITDA expansion. Moreover, the use of generative AI and the launch of consumer-centric features like Your Garage show that Cars.com is at the forefront of technological integration in the automotive retail space, enhancing user engagement and operational efficiency. These advancements, combined with strategic acquisitions, indicate a forward-looking approach that supports Prestopino’s positive outlook on the stock.
According to TipRanks, Prestopino is a top 100 analyst with an average return of 25.9% and a 56.06% success rate. Prestopino covers the Consumer Cyclical sector, focusing on stocks such as Liquidity Services, LKQ, and ACV Auctions.
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Cars (CARS) Company Description:
Cars.com, Inc. engages in the provision of automotive products and services through online automotive classifieds. It offers a digital automotive marketplace search engine, which connects buyers and sellers. The firm also sells online subscription advertising products to car dealerships. The company was founded by Mitch Golub, William Swislow, and Alex Vetter in 1998 and is headquartered in Chicago, IL.
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