Cars.com Chief Legal Officer Sold $368K In Company Stock

On May 28, a recent SEC filing unveiled that Angelique Strong Marks, Chief Legal Officer at Cars.com CARS made an insider sell.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday outlined that Marks executed a sale of 19,835 shares of Cars.com with a total value of $368,136.

The latest market snapshot at Wednesday morning reveals Cars.com shares down by 0.47%, trading at $19.24.

Unveiling the Story Behind Cars.com

Cars.com Inc is an online destination for buying and selling new and used vehicles. The company brands include Dealer Inspire, DealerRater, FUEL, Accu-Trade, PickupTrucks.com, CreditIQ, and NewCars.com., websites directed towards different consumer segments.

Financial Insights: Cars.com

Revenue Growth: Over the 3 months period, Cars.com showcased positive performance, achieving a revenue growth rate of 7.85% as of 31 March, 2024. This reflects a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Communication Services sector.

Profitability Metrics: Unlocking Value

• Gross Margin: Achieving a high gross margin of 83.37%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): Cars.com's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.01.

Debt Management: Cars.com's debt-to-equity ratio is below the industry average. With a ratio of 0.98, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Valuation Overview:

• Price to Earnings (P/E) Ratio: The P/E ratio of 12.23 is lower than the industry average, implying a discounted valuation for Cars.com's stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.87 is above industry norms, reflecting an elevated valuation for Cars.com's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 12.01 positions the company as being more valued compared to industry benchmarks.

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

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Uncovering the Importance of Insider Activity

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.

Breaking Down the Significance of Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Cars.com's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.