Analysts Have Made A Financial Statement On Cars.com Inc.'s (NYSE:CARS) Yearly Report
Last week, you might have seen that Cars.com Inc. (NYSE:CARS) released its annual result to the market. The early response was not positive, with shares down 3.7% to US$17.53 in the past week. Revenues of US$689m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.74, missing estimates by 2.3%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Cars.com
Following the latest results, Cars.com's seven analysts are now forecasting revenues of US$736.2m in 2024. This would be an okay 6.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dive 73% to US$0.49 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$735.3m and earnings per share (EPS) of US$0.64 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$23.29, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Cars.com analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$17.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cars.com shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cars.com's past performance and to peers in the same industry. The analysts are definitely expecting Cars.com's growth to accelerate, with the forecast 6.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.9% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Cars.com is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cars.com's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Cars.com going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Cars.com (2 are a bit unpleasant) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
