Core Insights - The federal EV tax credit is set to expire on September 30, 2025, prompting consumers to act quickly to purchase electric vehicles (EVs) before the deadline [1][2] - Awareness of the tax credit is high among consumers, with 70% of EV shoppers aware of it, and 78% indicating it significantly influences their decision to go electric [2] - Demand for new EVs on Cars.com has increased by 33% year over year, while demand for used EVs has risen by 22% year over year [2] Market Trends - New EV inventory grew by 1.4% year over year in August, while average new EV prices increased by 4.1% year over year due to the introduction of more premium models [5] - The used EV inventory surged by 38% year over year, with vehicles selling faster, averaging just 46 days on the lot compared to 66 days a year ago [5] - Tesla's average used EV prices fell by 16.2% year over year, contributing to an overall decline of 3.8% in average used EV prices [5] Consumer Behavior - Nearly half (47%) of potential EV buyers indicated that the elimination of the tax credit may accelerate their purchase timeline, reflecting a sense of urgency in the market [2] - Cars.com has identified top EV picks for 2026, highlighting models such as the Hyundai Ioniq 6, Ioniq 5, Kia EV9, and Chevrolet Equinox EV, which cater to various buyer preferences [3][4][8] Company Overview - Cars.com is the leading automotive marketplace, attracting nearly 26 million in-market consumers each month, providing data and resources to facilitate informed buying decisions [6]

Group 1: BanColombia - BanColombia is the largest banking company in terms of assets and market participation in deposit products and loans [1] - The company has a Zacks Rank of 1 (Strong Buy) and a 7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1][2] - BanColombia has a price-to-earnings ratio (P/E) of 7.53, significantly lower than the industry average of 11.60, and possesses a Value Score of A [2] Group 2: Cars.com - Cars.com provides new and used vehicle listings, expert and consumer reviews, and research tools [2] - The company holds a Zacks Rank of 1 and has seen a 1.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2][3] - Cars.com has a price-to-earnings ratio (P/E) of 7.57, compared to the industry average of 23.80, and also possesses a Value Score of A [3] Group 3: Methanex - Methanex is the world's largest supplier of methanol to North America, Asia-Pacific, Europe, and Latin America [3] - The company carries a Zacks Rank of 1 and has experienced a 15.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3][4] - Methanex has a price-to-earnings ratio (P/E) of 10.59, which is lower than the industry average of 12.30, and has a Value Score of A [4]

Core Viewpoint - The Russell 2000 has experienced a significant rebound of nearly +9% in the last month due to favorable macroeconomic conditions, including potential interest rate cuts and clearer tariff policies, which are expected to enhance investor sentiment towards small-cap U.S. companies [1]. Company Summaries Cars.com (CARS) - Cars.com stock is currently priced at $12, which is 40% below its 52-week high of $20. The company has faced challenges due to high interest rates, inflation, and tariffs impacting consumer demand for vehicles [2]. - Earnings estimates for Cars.com have seen slight upward revisions for fiscal years 2025 and 2026. The stock trades at 7X forward earnings, with EPS expected to increase by 4% this year and projected to rise by 32% in FY26 to $2.35. The Average Zacks Price Target of $17.17 indicates a potential upside of nearly 35% [3]. OppFi (OPFI) - OppFi is priced at $10 and has gained over +30% year-to-date, yet remains 40% below its 52-week high of $17. Analysts maintain a bullish outlook, with an Average Zacks Price Target of $14 suggesting a 36% upside [8]. - The stock trades at 7X forward earnings, with FY25 EPS expected to increase by 49% to $1.49. Recent revisions have shown a 15% increase in FY25 EPS estimates following strong Q2 earnings results. Annual earnings are projected to rise by 4% in FY26 to $1.48 per share, supported by sales projections exceeding $600 million [9][10]. Quad Graphics (QUAD) - Quad Graphics is trading at $6, just above penny stock status, and is a provider of commercial printing solutions. The Average Zacks Price Target suggests a potential return to its 52-week peak of $9 [12]. - The company is profitable and trades at 6X forward earnings. EPS revisions have increased, forecasting a 13% rise in FY25 and a further 15% increase in FY26 to $1.11 per share. Additionally, Quad Graphics offers a 4.5% annual dividend yield [13][14]. Conclusion - The favorable macroeconomic environment is expected to accelerate growth for these companies, making them attractive investment opportunities within the Russell 2000 [15].

Group 1: Halozyme Therapeutics - Halozyme Therapeutics is a biopharmaceutical company focused on developing and commercializing novel treatments for oncology by targeting the tumor microenvironment [1] - The company has a Zacks Rank of 1 (Strong Buy) and its current year earnings estimate has increased by 10.5% over the last 60 days [1] - Halozyme's shares have gained 36.2% over the last three months, significantly outperforming the S&P 500's gain of 7.5%, and it possesses a Momentum Score of A [2] Group 2: T. Rowe Price - T. Rowe Price is a global investment management organization offering a wide range of mutual funds, sub-advisory services, and separate account management for various investors [3] - The company also holds a Zacks Rank of 1 and has seen a 9% increase in its current year earnings estimate over the last 60 days [3] - T. Rowe Price's shares have increased by 14.2% over the last three months, again outperforming the S&P 500's gain of 7.5%, and it has a Momentum Score of A [4] Group 3: Cars.com - Cars.com operates an online automotive platform that provides listings for new and used vehicles, along with expert and consumer reviews and research tools [4] - The company has a Zacks Rank of 1 and its current year earnings estimate has risen by 2.3% over the last 60 days [4] - Cars.com's shares have appreciated by 22.3% over the last three months, surpassing the S&P 500's gain of 7.5%, and it also has a Momentum Score of A [5]

Core Viewpoint - Cars.com (CARS) shows potential for significant upside, with a mean price target of $17.17 indicating a 30.4% increase from its current price of $13.17 [1] Price Targets and Analyst Consensus - The average price target for CARS ranges from a low of $11.00 to a high of $25.00, with a standard deviation of $5.38, indicating variability in analyst estimates [2] - The lowest estimate suggests a decline of 16.5%, while the highest points to an upside of 89.8% [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about CARS' earnings prospects, with a positive trend in earnings estimate revisions [11] - Over the last 30 days, one estimate has increased, leading to a 9.9% rise in the Zacks Consensus Estimate for the current year [12] - CARS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are commonly referenced, they can mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q%20Filing%20Information) Cars.com Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025, detailing its registrant status and outstanding common stock - Cars.com Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025 [2](index=2&type=chunk) Registrant Status | Status | Indicator | | :-------------------- | :-------- | | Large accelerated filer | ☒ | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ | - As of July 31, 2025, the registrant had **61,445,496 shares of common stock outstanding** [4](index=4&type=chunk) [Table of Contents](index=2&type=section&id=Table%20of%20Contents) This section provides an organized listing of all chapters and sub-sections within the Form 10-Q report [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements and detailed notes for the reporting periods [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total current assets | $179,645 | $214,330 | | Total assets | $1,064,654 | $1,111,865 | | Total current liabilities | $98,926 | $116,885 | | Total liabilities | $581,437 | $600,380 | | Total stockholders' equity | $483,217 | $511,485 | - Total assets decreased by **$47.211 million** from December 31, 2024, to June 30, 2025, primarily driven by a decrease in cash and cash equivalents and intangible assets [9](index=9&type=chunk) - Total stockholders' equity decreased by **$28.268 million**, from **$511.485 million** to **$483.217 million**, reflecting net loss and share repurchases [9](index=9&type=chunk)[16](index=16&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This section details the company's revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $178,739 | $178,894 | $357,763 | $359,070 | | Operating income | $15,246 | $9,517 | $21,705 | $22,261 | | Net income | $7,009 | $11,381 | $4,996 | $12,165 | | Basic EPS | $0.11 | $0.17 | $0.08 | $0.18 | | Diluted EPS | $0.11 | $0.17 | $0.08 | $0.18 | - Net income for the three months ended June 30, 2025, decreased by **38%** to **$7.009 million** from **$11.381 million** in the prior-year period [11](index=11&type=chunk) - For the six months ended June 30, 2025, net income decreased by **59%** to **$4.996 million** from **$12.165 million** in the prior-year period [11](index=11&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's comprehensive income, including net income and other comprehensive income items, for the specified periods Consolidated Statements of Comprehensive Income Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $7,009 | $11,381 | $4,996 | $12,165 | | Foreign currency translation adjustments | $1,793 | $(338) | $1,337 | $(1,076) | | Comprehensive income | $8,802 | $11,043 | $6,333 | $11,089 | - Comprehensive income for the three months ended June 30, 2025, was **$8.802 million**, a decrease from **$11.043 million** in the prior-year period, primarily due to lower net income [14](index=14&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's stockholders' equity, including net income, share repurchases, and stock-based compensation Stockholders' Equity Changes (in thousands) | Item | Six Months Ended June 30, 2025 | | :------------------------------------------ | :----------------------------- | | Balance at December 31, 2024 | $511,485 | | Net loss (Q1 2025) | $(2,013) | | Net income (Q2 2025) | $7,009 | | Repurchases of common stock | $(44,967) | | Stock-based compensation | $15,065 | | Balance at June 30, 2025 | $483,217 | - The company repurchased **3.7 million shares** for **$44.6 million** during the six months ended June 30, 2025, at an average price of **$12.17 per share** [48](index=48&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | Change | | :----------------- | :-------- | :-------- | :-------- | | Operating activities | $55,683 | $68,722 | $(13,039) | | Investing activities | $(29,124) | $(12,493) | $(16,631) | | Financing activities | $(49,343) | $(66,223) | $16,880 | | Net decrease in Cash | $(22,969) | $(10,127) | $(12,842) | - Net cash provided by operating activities decreased by **$13.039 million**, primarily due to lower net income and increased earnout payments related to the D2C acquisition [105](index=105&type=chunk) - Cash used in investing activities increased by **$16.631 million**, mainly due to the DealerClub Acquisition, partially offset by proceeds from the sale of the RepairPal equity investment [106](index=106&type=chunk) [Notes to the Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements [NOTE 1. Description of Business and Summary of Significant Accounting Policies](index=8&type=section&id=NOTE%201.%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes Cars.com Inc.'s business operations and outlines the significant accounting policies applied in preparing the financial statements - Cars.com Inc., d/b/a Cars Commerce Inc., is an audience-driven technology company empowering the automotive industry, simplifying car buying and selling with data and machine learning-powered products [21](index=21&type=chunk) - The Cars Commerce platform includes Cars.com, Dealer Inspire, D2C Media, AccuTrade, DealerClub, and Cars Commerce Media Network [21](index=21&type=chunk) - The company is evaluating new FASB guidance (ASU 2024-03 and ASU 2023-09) on expense disaggregation and income tax disclosures, effective for fiscal years beginning after December 15, 2026, and December 15, 2024, respectively [26](index=26&type=chunk)[27](index=27&type=chunk) [NOTE 2. Revenue](index=10&type=section&id=NOTE%202.%20Revenue) This note provides disaggregated revenue information by source and discusses factors influencing revenue trends Disaggregated Revenue Information (in thousands) | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Dealer | $158,477 | $159,843 | $317,621 | $321,658 | | OEM and National | $16,637 | $15,828 | $32,916 | $31,135 | | Other | $3,625 | $3,223 | $7,226 | $6,277 | | Total revenue | $178,739 | $178,894 | $357,763 | $359,070 | - Dealer revenue, the largest stream, decreased by **1%** for both the three and six months ended June 30, 2025, primarily due to lower average dealer count and customer mix changes, partially offset by solutions growth [73](index=73&type=chunk)[86](index=86&type=chunk) - OEM and National revenue increased by **5%** and **6%** for the three and six months, respectively, driven by increased OEM spending and higher on-the-lot inventory levels [74](index=74&type=chunk)[87](index=87&type=chunk) [NOTE 3. Business Combinations](index=10&type=section&id=NOTE%203.%20Business%20Combinations) This note details recent acquisition activities, including the purchase of DealerClub Inc. and related financial considerations - In January 2025, Cars.com Inc. acquired DealerClub Inc., a dealer-to-dealer digital wholesale auction platform, for a total purchase consideration of **$25.3 million** [30](index=30&type=chunk) - The acquisition included a preliminary goodwill allocation of **$22.0 million**, primarily attributed to expected sales growth and the value of the acquired workforce [32](index=32&type=chunk)[38](index=38&type=chunk) - The acquisition also includes potential performance-based consideration of up to **$88.0 million**, contingent on DealerClub's revenue targets through December 31, 2028 [31](index=31&type=chunk) [NOTE 4. RepairPal Equity Investment](index=12&type=section&id=NOTE%204.%20RepairPal%20Equity%20Investment) This note describes the sale of the RepairPal equity investment and the proceeds received - During Q4 2024, the Company sold its RepairPal equity investment, receiving **$9.5 million** in closing proceeds during Q1 2025, reflected in investing activities [40](index=40&type=chunk) [NOTE 5. Debt](index=12&type=section&id=NOTE%205.%20Debt) This note provides information on the company's debt structure, compliance with covenants, and available borrowing capacity - As of June 30, 2025, the Company was in compliance with all debt covenants, with a Senior Secured Net Leverage Ratio of **0.2x** and a Consolidated Interest Coverage Ratio of **6.7x** [41](index=41&type=chunk) - The Company amended its Credit Agreement in May 2024, resulting in a new **$350.0 million** Revolving Loan due in 2029, with **$290.0 million** available to borrow as of June 30, 2025 [42](index=42&type=chunk)[43](index=43&type=chunk) - Outstanding indebtedness as of June 30, 2025, included **$400.0 million** in 6.375% Senior Unsecured Notes due 2028 and **$60.0 million** under the Revolving Loan [43](index=43&type=chunk)[44](index=44&type=chunk)[99](index=99&type=chunk) [NOTE 6. Commitments and Contingencies](index=13&type=section&id=NOTE%206.%20Commitments%20and%20Contingencies) This note outlines the company's legal proceedings and other commitments and contingencies - The Company is involved in various legal proceedings in the ordinary course of business but does not expect their ultimate resolution to have a material adverse effect on its financial position, results of operations, or cash flows [47](index=47&type=chunk) [NOTE 7. Stockholders' Equity](index=13&type=section&id=NOTE%207.%20Stockholders'%20Equity) This note details changes in stockholders' equity, including share repurchase programs and activity - The Board of Directors authorized a three-year share repurchase program on February 27, 2025, to acquire up to **$250.0 million** of common stock [48](index=48&type=chunk)[101](index=101&type=chunk) - During the six months ended June 30, 2025, the Company repurchased **3.7 million shares** for **$44.6 million** at an average price of **$12.17 per share** [48](index=48&type=chunk)[101](index=101&type=chunk) [NOTE 8. Stock-Based Compensation](index=13&type=section&id=NOTE%208.%20Stock-Based%20Compensation) This note describes the company's stock-based compensation plans and activity for restricted and performance share units - Stockholders approved amendments to the Omnibus Plan on June 4, 2025, increasing authorized shares by **4.0 million** to a total of **22.0 million** and extending the plan term to June 4, 2035 [49](index=49&type=chunk) Restricted Share Units (RSUs) Activity (in thousands) | RSU Activity | Number of RSUs | Weighted-Average Grant Date Fair Value | | :-------------------------- | :------------- | :------------------------------------- | | Outstanding as of Dec 31, 2024 | 3,637 | $16.52 | | Granted | 2,738 | $11.60 | | Vested and delivered | (1,401) | $16.23 | | Forfeited | (284) | $15.42 | | Outstanding as of June 30, 2025 | 4,690 | $13.80 | Performance Share Units (PSUs) Activity (in thousands) | PSU Activity | Number of PSUs | Weighted-Average Grant Date Fair Value | | :-------------------------- | :------------- | :------------------------------------- | | Outstanding as of Dec 31, 2024 | 931 | $16.37 | | Granted | 542 | $12.94 | | Vested and delivered | (245) | $14.78 | | Forfeited | (44) | $16.94 | | Outstanding as of June 30, 2025 | 1,184 | $15.10 | [NOTE 9. Earnings Per Share](index=15&type=section&id=NOTE%209.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share for the reporting periods Earnings Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $7,009 | $11,381 | $4,996 | $12,165 | | Basic weighted-average common shares | 63,163 | 66,534 | 63,859 | 66,426 | | Diluted weighted-average common shares | 63,842 | 67,821 | 64,476 | 67,514 | | Earnings per share, basic | $0.11 | $0.17 | $0.08 | $0.18 | | Earnings per share, diluted | $0.11 | $0.17 | $0.08 | $0.18 | - Potential shares from the DealerClub Acquisition's contingent consideration were excluded from diluted EPS calculations as the contingency for issuance was not met [54](index=54&type=chunk) [NOTE 10. Income Taxes](index=15&type=section&id=NOTE%2010.%20Income%20Taxes) This note explains the effective income tax rate and its reconciliation to the statutory federal rate - The effective income tax rate for the six months ended June 30, 2025, differed from the statutory federal rate of **21%** primarily due to tax expense on stock-based compensation and nondeductible items [55](index=55&type=chunk)[95](index=95&type=chunk) [NOTE 11. Segment Information](index=15&type=section&id=NOTE%2011.%20Segment%20Information) This note clarifies that the company operates as a single operating and reportable segment - The Company operates as a single operating and reportable segment, with the CEO making resource allocation decisions to maximize consolidated financial results [56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition, results of operations, key metrics, and capital resources [Business Overview](index=22&type=section&id=Business%20Overview) This section describes Cars Commerce's role as an audience-driven technology company simplifying car buying and selling through its integrated platform - Cars Commerce is an audience-driven technology company that simplifies car buying and selling through data and machine learning-powered products across pretail, retail, and post-sale activities [62](index=62&type=chunk) - The platform integrates five key capabilities: Cars.com marketplace, Dealer Inspire and D2C Media for digital retail, AccuTrade for trade-ins, DealerClub for wholesale auctions, and Cars Commerce Media Network for in-market media solutions [62](index=62&type=chunk) [Overview of Results](index=22&type=section&id=Overview%20of%20Results) This section provides a high-level summary of the company's financial performance, including revenue and net income trends Financial Performance Overview (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $178,739 | $178,894 | $357,763 | $359,070 | | Net income | $7,009 | $11,381 | $4,996 | $12,165 | - Total revenue remained relatively flat for both the three and six months ended June 30, 2025, compared to the prior-year periods [63](index=63&type=chunk) - Net income saw a significant decrease for both the three-month (**-38%**) and six-month (**-59%**) periods year-over-year [63](index=63&type=chunk) [Key Operating Metrics](index=22&type=section&id=Key%20Operating%20Metrics) This section presents key performance indicators such as traffic, unique visitors, dealer customers, and average revenue per dealer Key Operating Metrics (Traffic and Average Monthly Unique Visitors in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Traffic | 162,036 | 158,117 | 2% | 332,123 | 329,554 | 1% | | Average Monthly Unique Visitors | 26,649 | 26,107 | 2% | 27,848 | 27,220 | 2% | | Dealer Customers (June 30) | 19,412 | 19,390 | 0% | N/A | N/A | N/A | | Monthly Average Revenue Per Dealer (ARPD) | $2,435 | $2,474 | (2)% | N/A | N/A | N/A | - Traffic and Average Monthly Unique Visitors increased by **1-2%** year-over-year, driven by increased consumer demand in anticipation of rising automotive tariffs and strategic marketing shifts [64](index=64&type=chunk)[66](index=66&type=chunk) - Dealer Customers increased slightly by **1%** from March 31, 2025, while Monthly Average Revenue Per Dealer (ARPD) decreased by **2%** for the three months ended June 30, 2025, primarily due to changes in customer mix [64](index=64&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [Factors Affecting Our Performance](index=24&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses internal and external factors influencing the company's business performance and long-term success - Business performance is influenced by the broader automotive ecosystem, including supply/demand for vehicles, global supply chain disruptions, vehicle costs, retail prices, EV adoption rates, and macroeconomic factors like inflation, tariffs, and interest rates [70](index=70&type=chunk) - Long-term success depends on executing a platform strategy, including growing an engaged audience, expanding dealer relationships, transforming OEM partnerships, and leveraging digital solutions like AI to help customers compete in the online car-shopping environment [71](index=71&type=chunk) [Results of Operations - Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=25&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) This section analyzes the company's revenue and operating expenses for the three-month period, highlighting changes and their drivers Revenue and Operating Expenses (Three Months Ended June 30, in thousands) | Category | 2025 | 2024 | $ Change | % Change | | :-------------------------- | :-------- | :-------- | :-------- | :------- | | Total revenue | $178,739 | $178,894 | $(155) | (0)% | | Cost of revenue and operations | $30,547 | $31,030 | $(483) | (2)% | | Product and technology | $28,634 | $27,583 | $1,051 | 4% | | Marketing and sales | $57,757 | $60,213 | $(2,456) | (4)% | | General and administrative | $21,682 | $22,980 | $(1,298) | (6)% | | Depreciation and amortization | $24,873 | $27,571 | $(2,698) | (10)% | | Total operating expenses | $163,493 | $169,377 | $(5,884) | (3)% | | Operating income | $15,246 | $9,517 | $5,729 | 60% | | Net income | $7,009 | $11,381 | $(4,372) | (38)% | - Operating income increased by **60%** to **$15.246 million**, driven by a **3%** decrease in total operating expenses, particularly in marketing and sales, and depreciation and amortization [73](index=73&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk) - Net income decreased by **38%** due to a significant reduction in 'Other income, net' (down **84%**), primarily from changes in the fair value of contingent consideration in the prior year [73](index=73&type=chunk)[83](index=83&type=chunk) [Results of Operations - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=28&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) This section analyzes the company's revenue and operating expenses for the six-month period, highlighting changes and their drivers Revenue and Operating Expenses (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | $ Change | % Change | | :-------------------------- | :-------- | :-------- | :-------- | :------- | | Total revenue | $357,763 | $359,070 | $(1,307) | (0)% | | Cost of revenue and operations | $61,486 | $60,992 | $494 | 1% | | Product and technology | $57,112 | $55,668 | $1,444 | 3% | | Marketing and sales | $117,982 | $119,376 | $(1,394) | (1)% | | General and administrative | $47,566 | $45,837 | $1,729 | 4% | | Depreciation and amortization | $51,912 | $54,936 | $(3,024) | (6)% | | Total operating expenses | $336,058 | $336,809 | $(751) | (0)% | | Operating income | $21,705 | $22,261 | $(556) | (2)% | | Net income | $4,996 | $12,165 | $(7,169) | (59)% | - Operating income decreased by **2%** to **$21.705 million**, while total operating expenses remained relatively flat [86](index=86&type=chunk) - Net income decreased by **59%** to **$4.996 million**, primarily due to a significant decrease in 'Other income, net' (down **79%**) compared to the prior-year period [86](index=86&type=chunk)[94](index=94&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, cash position, debt, and capital commitments - Primary liquidity sources are cash flows from operations, available cash reserves, and borrowing capacity under the credit facility, which are believed to be adequate for the next 12 months [97](index=97&type=chunk) - As of June 30, 2025, Cash and cash equivalents were **$27.7 million**, and total liquidity, including the undrawn Revolving Loan, was **$317.7 million** [98](index=98&type=chunk) - The Company has potential earnout payments, including **CAD$15.0 million** (approx. **USD$10.8 million**) paid in April 2025 for the D2C Media acquisition and up to **$88.0 million** for the DealerClub acquisition [104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that the company's market risk exposures have not materially changed since the previous annual report - The Company's market risk exposures have not materially changed since December 31, 2024 [111](index=111&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance of timely and accurate financial reporting [112](index=112&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control during the quarter [114](index=114&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes additional information not covered in the financial statements, such as legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 6 for details on the company's legal proceedings - Information on legal proceedings is provided in Note 6 (Commitments and Contingencies) of the Consolidated Financial Statements [117](index=117&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the annual report - No material changes to the risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024 [118](index=118&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activity under its publicly announced program for the quarter Common Stock Repurchase Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Dollar Value of Shares that May Yet Be Purchased (in thousands) | | :-------------------------- | :------------------------------- | :--------------------------- | :-------------------------------------------------------------------- | | April 1 through April 30, 2025 | 823,942 | $11.24 | $229,013 | | May 1 through May 31, 2025 | 730,494 | $10.69 | $221,201 | | June 1 through June 30, 2025 | 558,888 | $10.79 | $215,168 | | **Total** | **2,113,324** | | | - The Company repurchased **2,113,324 shares** during the quarter, with **$215.168 million** remaining under the **$250.0 million** share repurchase program as of June 30, 2025 [120](index=120&type=chunk)[123](index=123&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that the company reported no defaults upon senior securities during the period - There were no defaults upon senior securities [121](index=121&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable to the Company [122](index=122&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section confirms no directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements - None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 [124](index=124&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents and certifications - Key exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, and the Amended and Restated Omnibus Incentive Compensation Plan [126](index=126&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are also filed [126](index=126&type=chunk) [Signatures](index=36&type=section&id=Signatures) This section provides the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report - The report was signed on August 7, 2025, by T. Alex Vetter, Chief Executive Officer, and Sonia Jain, Chief Financial Officer [132](index=132&type=chunk)

Group 1 - Shares of Cars.com (CARS) have increased by 4.7% over the past four weeks, closing at $13.13, with a mean price target of $17.08 indicating a potential upside of 30.1% [1] - The mean estimate consists of six short-term price targets with a standard deviation of $5.02, where the lowest estimate is $12.00 (an 8.6% decline) and the highest is $25.00 (a 90.4% increase) [2] - Analysts show strong agreement on the company's ability to report better earnings than previously predicted, which supports the potential for stock upside [4][11] Group 2 - The Zacks Consensus Estimate for the current year has risen by 0.8% over the past month, with one estimate increasing and no negative revisions [12] - CARS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting stock gains, they can indicate the direction of price movement, which appears to be a useful guide [14]

Core Viewpoint - The article emphasizes the importance of value investing as a strategy to identify strong stocks, particularly highlighting Cars.com (CARS) as a notable opportunity due to its favorable valuation metrics and earnings outlook [2][3][6]. Company Analysis - Cars.com (CARS) currently holds a Zacks Rank of 2 (Buy) and has received an A grade in the Value category, indicating it is among the strongest value stocks available [3]. - The P/S ratio for CARS is 1.16, which is lower than the industry average of 1.25, suggesting that CARS may be undervalued compared to its peers [4]. - CARS has a P/CF ratio of 5.28, significantly lower than the industry average of 14.63, indicating a strong cash flow outlook and potential undervaluation [5]. - Over the past year, CARS's P/CF has fluctuated between a high of 9.71 and a low of 4.20, with a median of 7.09, further supporting the notion of its current undervaluation [5]. - The combination of these metrics positions Cars.com as a strong candidate for value investors, particularly given its positive earnings outlook [6].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $179 million, reflecting a steady year-over-year performance with a 5% growth in OEM and national revenue, partially offset by temporary softness in dealer revenue [5][21] - Adjusted EBITDA for Q2 was $51 million, with an adjusted EBITDA margin of 28.5%, at the high end of the outlook range, driven by cost efficiencies [27][34] - Net income for Q2 was $7 million, or $0.11 per diluted share, compared to $11 million, or $0.17 per diluted share a year ago [27] Business Line Data and Key Metrics Changes - Dealer count increased to 19,412, up 162 dealers quarter-over-quarter, marking the best sequential organic growth in over three years [5][14] - Solutions products, including AccuTrade and Dealer Club, contributed significantly to growth, with AccuTrade's subscriber base reaching 1,070 dealers [16][21] - Average revenue per dealer (ARPD) was $2,435, down approximately $40 year-over-year and sequentially, attributed to customer and product mix [28] Market Data and Key Metrics Changes - Traffic on the cars.com platform reached a record 162 million in Q2, up 2% year-over-year, with average monthly unique visitors totaling 26.6 million [10] - OEM and national revenue grew 5% year-over-year, with nearly half of OEM partners increasing their spending on the platform [8][25] - The marketplace performance showed strong momentum, with total marketplace customers growing sequentially every month since January [22] Company Strategy and Development Direction - The company is focused on enhancing its marketplace and solutions offerings, with new product innovations and repackaging efforts aimed at driving revenue growth [7][29] - Continued investment in AI features is expected to differentiate the platform and drive lead volume and quality [12][43] - The company anticipates low single-digit revenue growth for 2025, with expectations for acceleration heading into 2026 [9][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve stronger financial results in the second half of 2025, driven by growth initiatives and improved sales velocity [20][34] - There remains uncertainty regarding new vehicle production and pricing forecasts, which could impact discretionary media spending [33] - Management noted that dealer sentiment is improving, with a willingness to compete more aggressively for volume [88] Other Important Information - The company raised its full-year share repurchase target to $70 million to $90 million, consistent with its commitment to return value to shareholders [20][31] - Free cash flow for the year-to-date was $42 million, down year-over-year, primarily due to anticipated earn-out payments [30] Q&A Session Summary Question: Clarification on outlook and acceleration in business - Management expects to see acceleration from Q2 to Q3 to Q4, driven by unit growth and repackaging efforts [38] Question: Average revenue per dealer expectations - Management anticipates that ARPD will improve sequentially from Q2 to Q3 as repackaging takes effect [40] Question: Impact of AI on marketplace model - Management views AI as an opportunity to enhance user experience and engagement, with a focus on integrating AI capabilities into the platform [42][43] Question: Drivers of dealer revenue growth and ARPD decline - The decline in ARPD is attributed to customer mix and product mix, with a growing base of solutions-first customers impacting initial ARPD [49] Question: Retention of AccuTrade customers - Retention is improving, particularly with enterprise-level deals that standardize AccuTrade across multiple stores [66] Question: Marketplace repackaging rollout - The repackaging effort will be rolled out over the course of two quarters, focusing on creating added value for dealers [68] Question: OEM growth as a tailwind - OEM growth is expected to contribute positively to revenue goals in both Q3 and Q4, with management staying close to OEM partners [73] Question: Competitive threat from Amazon - Management acknowledges Amazon as a potential threat but believes the company is well-positioned due to its established platform and strong dealer relationships [78]

Company Performance - Cars.com reported quarterly earnings of $0.41 per share, missing the Zacks Consensus Estimate of $0.46 per share, but showing an increase from $0.38 per share a year ago, representing an earnings surprise of -10.87% [1] - The company posted revenues of $178.74 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.59%, and showing a slight decrease from year-ago revenues of $178.89 million [2] - Over the last four quarters, Cars.com has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - Cars.com shares have declined approximately 24.2% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.48 on revenues of $181.96 million, and for the current fiscal year, it is $1.75 on revenues of $725.04 million [7] - The estimate revisions trend for Cars.com was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Internet - Commerce industry, to which Cars.com belongs, is currently in the bottom 34% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]