CARS- Embedded Expectations Analysis - 2019 03 25
Cars.com Inc. (CARS:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 19.4x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their revenue guidance, dealer growth, digital solutions, and technology initiatives.Specifically, management may lack confidence in their ability to meet revenue guidance, improve and retain their dealers, and sustain net revenue uplifts. Moreover, they may be exaggerating the capabilities of their Deal Inspire and AutoCorrected solutions, their ability to develop disruptive car-buying technology, and the value their digital solutions add to dealerships. In addition, they may be concerned about the costs and timing of their cloud migration, and may be overstating the expected efficiencies gained from the new cloud infrastructure. Furthermore, they may be downplaying concerns about quarterly revenue declines, and national advertising market volatility. Finally, they may be concerned about their ability to quickly integrate new technology and transition customers to their digital solutions strategies.
Cars.com is a digital marketplace and solutions provider for the automotive industry that connects car shoppers with sellers and original equipment manufacturers. The company's portfolio of brands includes Cars.com, Dealer Inspire, DealerRater, Auto.com, NewCars.com and PickupTrucks.com. The CARS marketplace consists of a website that features a database of new and used vehicle listings, reviews, news and research section. Dealer Inspire is engaged in automotive technology that provides websites, technology solutions and advertising services to dealers across the United States and Canada. DealerRater is a source of user-generated reviews of both automobile dealers and dealership salespeople.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.