BTIG Upgrades Cars.com (CARS) to Buy

BTIG analyst Marvin Fong upgraded Cars.com (NYSE: CARS) from Neutral to Buy with a price target of $10.00.

The analyst comments "Shares are down 42% YTD and 69% over the past 12 months. After selling off 16% on its 4Q19 report, CARS has sold off another 20% as the online autos names have underperformed the market which is down (5%) since CARS reported on 2/26. We find the current valuation compelling as fundamentally the company appears to be executing on its turnaround. Our upgrade is further informed by our recession stress-case where we model the following adverse developments: 1) a punishing one-time 2,850 loss in dealer count in 2Q20 (~15% of CARS’ dealer base); 2) double our current expectation of a 9% decline in OEM advertising revenue this year; 3) a slowdown in Dealer Inspire (DI) client adds, although we continue to model GM dealers onboarding; and 4) no material reduction in opex other than in marketing expense."

For an analyst ratings summary and ratings history on Cars.com click here. For more ratings news on Cars.com click here.

Shares of Cars.com closed at $7.10 yesterday.

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