The automotive industry is facing some headwinds right now. Rising interest rates certainly don’t help when consumers are out there looking for their next purchase. It can have buyers thinking about staying in their existing cars longer. There is a also a huge supply of used cars flooding the market and putting pressure on used car prices. That’s making used cars that much more attractive and forcing manufacturers to give huge incentives on new leases. As the internet continues to revolutionize the auto world, it’s making it tougher for businesses to thrive that aren’t adapting quick enough. One online source for used cars is beginning to see the pressure from increased competition. That’s why today I’m naming Cars.com (CARS - Free Report) my Bear of the Day.
Cars.com Inc., through its subsidiaries, operates as a digital automotive marketplace that connects local car dealers to consumers in the United States. The company offers a suite of digital solutions that creates connections between individuals researching cars or looking to purchase a car with car dealerships and automotive original equipment manufacturers. It also sells online subscription advertising products to car dealerships by its direct sales force, as well as through its affiliate sales channel. In addition, the company sells display advertising to national advertisers. Further, it offers online automotive marketplace service that connects buyers and sellers through Cars.com, Auto.com, DealerRater.com, NewCars.com, PickupTrucks.com, DealerInspire.com, and LaunchDigitalMarketing.com Websites.
The reason for the unfavorable Zacks Rank is the string of recent earnings estimate revisions to the downside. Over the last week, analysts have cut their expectations for the current quarter and current year. That bearish sentiment has dropped our Zacks Consensus Estimate from 67 cents to 57 cents for the current quarter while the current year number has come down from $2.37 to $2.13.
Cars.com is in our Internet Commerce industry which ranks in the Bottom 16% of our Zacks Industry Rank. Investors looking for other names in the same industry should checkout Zacks Rank #2(BUY) Expedia (EXPE - Free Report) .
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