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Cars.com

CARS
54
Internet Content & Information · Communication Services
Price
$11.99
-0.33 (-2.68%)
Market Cap
$670.3M
Winston Score
54
Winston is curious
Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−13.5% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 71.3M (2021) → 61.7M (2025)

Cars.com is an online marketplace that connects car buyers with car dealerships across the United States. Its main product is a website and app where people can search for new and used vehicles, read reviews, and compare prices. The company also owns the Dealer Inspire brand, which builds websites and digital marketing tools for auto dealers.

Cars.com makes money by charging dealerships subscription and advertising fees to list their inventory and reach potential buyers. It operates almost entirely in the United States and generates roughly $700 million in annual revenue. Its moat comes from its established brand and the large volume of car listings it hosts, which attracts buyers and keeps dealers paying for visibility. The main risk is competition from larger platforms like CarGurus, AutoTrader, and increasingly from automakers and dealers building their own direct digital channels, which could pressure pricing and dealer retention over time.

Winston Score History

Politician Trades

1 trades / 12mo

0 Congressional buys and 1 sell on CARS in the last 12 months.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+0.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+370.8% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (12%)

Research and development spending

Insider Activity

15.8%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$65M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Cars.com is growing revenue at 1% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
82.4%
Premium pricing power — 82.4% gross margin
Operating Margin
9.2%
Modest — 9.2% operating margin
ROCE
1.8%
Weak — 1.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
+0.9%
Nearly flat sales (0.9% YoY)
EPS YoY
-36.9%
Earnings shrinking (-36.9% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
599%
Turns 599% of profit into real cash
FCF Margin
21.8%
Converts sales into free cash efficiently (21.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
0.98
Moderate — manageable debt (0.98)
Interest Cover
4.55x
Adequate interest coverage (4.5x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
27.6x
Growth-priced — P/E 27.6

P/E above the market average. People are paying up for expected growth.

P/E vs Forward
+22.8
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (27.6 → 4.8)

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Dividends

Not applicable for this business.
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