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Cars.com Inc. operates as a digital marketplace and provides solutions for the automotive industry. Its platform connects car shoppers with sellers. The company, enable dealers and automotive manufacturers; connect sellers with ready-to-buy shoppers that provide financing tools with instant online loan screening and approvals; and empower shoppers with the resources and and digital tools needed to make car buying decisions. It also offers marketplace products, such as Marketplace subscription advertising; digital solutions, including website creation and platform hosting, vehicle acquisition and valuation, digital retailing, and review and reputation management; and media comprising display advertising, social selling, digital advertising, and in-market video services. As of December 31, 2022, the company served 19,506 dealer customers in 50 states, which included franchise and independent dealers, with digital and brick-and-mortar stores. Its customers are local car dealers, OEMs, and other national advertisers and lenders. Cars.com Inc. was founded in 1998 and is based in Chicago, Illinois.
Discounted Cash Flow Valuation of Cars.com Inc.
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is -29.51%.
The trend of Net Margin over the past 5 years is -7.31%.
The average ROA over the past 5 years is -14.11%.
The trend of ROA over the past 5 years is -1.44%.
The average ROE over the past 5 years is -42.82%.
The trend of ROE over the past 5 years is -7.04%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 3.65.
The trend of Debt/FCF over the past 5 years is -0.08.
Graham’s Stability measure stands at -3.04.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +0.87%.
The trend of Revenue growth rate over the past 5 years is +0.38%.
The Earnings CAGR over the past 5 years is -40.17%.
The trend of Earnings growth rate over the past 5 years is +20.29%.
The Equity CAGR over the past 5 years is -25.54%.
The trend of Equity growth rate over the past 5 years is +0.33%.
The FCF CAGR over the past 5 years is -6.61%.
The trend of FCF growth rate over the past 5 years is +1.73%.