CARS – Market expectations are for declining Uniform ROA, and management has concerns about guidance, growth, innovation, and technology

• Cars.com Inc. (CARS:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 19.4x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their revenue guidance, dealer growth, digital solutions, and technology initiatives
• Specifically, management may lack confidence in their ability to meet revenue guidance, improve and retain their dealers, and sustain net revenue uplifts. Moreover, they may be exaggerating the capabilities of their Deal Inspire and AutoCorrected solutions, their ability to develop disruptive car-buying technology, and the value their digital solutions add to dealerships. In addition, they may be concerned about the costs and timing of their cloud migration, and may be overstating the expected efficiencies gained from the new cloud infrastructure. Furthermore, they may be downplaying concerns about quarterly revenue declines, and national advertising market volatility. Finally, they may be concerned about their ability to quickly integrate new technology and transition customers to their digital solutions strategies