Cars.com Poised To Claim Larger Share Of Ad Dollars, Analyst Initiates 'Buy' Rating

Shares of Cars.com Inc CARS continued to climb in early trading on Thursday, and has added more than 55% year to date.

The company is positioned for “sustainable growth” in a large total addressable market (TAM), estimated at $50 billion, according to B Riley Securities.

The Cars.com Analyst: Naved Khan initiated coverage of CARS with a Buy rating and price target of $26.

The Cars.com Thesis: The company’s digital product suite is poised for an increasing share of ad dollars, Khan said in the initiation note.

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Cars.com could also benefit from “off-platform advertising as well as other solutions such as vehicle valuation and wholesale solutions (Accu-Trade), its dealer Web site solution (Dealer Inspire), and loan prequalification (Credit IQ),” the analyst added.

“Normalization of dealer inventory and OEM production creates a favorable backdrop,” Khan wrote. “Large, high-intent audience of car shoppers and high organic traffic mix provide competitive advantage and operating efficiency,” he added.

CARS Price Action: Shares of Cars.com were up 2.8% to $21.59 at the time of publication Thursday.

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