From Nasdaq: 2025-04-15 04:00:00

With higher tariffs on imported vehicles likely to raise costs, Cars.com’s stock has dropped over 30% this year, trading near its 52-week low. The pandemic’s supply chain effects and higher tariffs have reduced availability of used cars, leading to fewer trade-ins and off-lease vehicles.

Cars.com’s EPS growth looks promising, but FY25 and FY26 estimates have declined recently. The company has missed earnings expectations for six quarters, with an average EPS surprise of -29.81% in the last four reports. Sales estimates were also missed in two of the last four quarters.

Cars.com faces increased competition in the automotive marketplace, struggling to reach a billion dollars in annual sales. Low inventory levels and high vehicle prices have hindered revenue growth, while rivals like Autotrader, CarGurus, CarMax, and Carvana pose strong competition.

Increased competition and macroeconomic concerns have led to a Zacks Rank of #5 (Strong Sell) for Cars.com stock. While trading at just 5.7X forward earnings, caution is advised as there may be more downside risk ahead for investors.

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Read more at Nasdaq: Bear of the Day: Cars.com (CARS)