Cars.com (CARS) Q3 earnings: what to expect

Online new and used car marketplace Cars.com (NYSE:CARS) will be announcing earnings results this Thursday before the bell. Here’s what to expect.

Cars.com met analysts’ revenue expectations last quarter, reporting revenues of $179.9 million, flat year on year. It was a mixed quarter for the company, with a decent beat of analysts’ EBITDA estimates but disappointing growth in its buyers. It reported 19,343 active buyers, flat year on year.

Is Cars.com a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Cars.com’s revenue to grow 1% year on year, in line with the 1.1% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Cars.com has missed Wall Street’s revenue estimates multiple times over the last two years.

Looking at Cars.com’s peers in the online marketplace segment, some have already reported their Q3 results, giving us a hint as to what we can expect. EverQuote delivered year-on-year revenue growth of 25.4%, beating analysts’ expectations by 7.6%, and Etsy reported revenues up 10.9%, topping estimates by 3.8%. EverQuote traded up 20.3% following the results while Etsy was also up 4.5%.

Read our full analysis of EverQuote’s results here and Etsy’s results here.

There has been positive sentiment among investors in the online marketplace segment, with share prices up 4.4% on average over the last month. Cars.com is up 19.2% during the same time and is heading into earnings with an average analyst price target of $13.33 (compared to the current share price of $11.57).

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