Cars.com (CARS) Stock Forecast & Price Target

Cars.com Inc. has demonstrated a solid financial performance with a 5% year-over-year increase in OEM and National revenues, indicating robust demand for its services. The company's Accu-Trade platform has shown impressive growth, with appraisals rising by 44.8% year-over-year to 925,000 and a sequential increase of 13.6%, while its subscriber base expanded to 1,070 dealers. Additionally, the continued sequential growth in total marketplace customers throughout the first half of the year reflects strong momentum and improvement in dealer count, further enhancing the company's market position.

Cars.com Inc. has experienced a decrease in net cash provided by operating activities, declining from $35.3 million to $26.2 million, alongside a significant 37% drop in free cash flow to $18.2 million. The company's revenue remained stagnant at $178.7 million, showing no year-over-year or quarter-over-quarter growth, with sluggish marketplace and media performance attributed to customer reluctance in spending on discretionary advertising. The worsening cash flow situation is linked to expected increases in earnout payments connected to the direct-to-consumer media acquisition, further straining the company's financial position.