CARS - Cars.com rips 11% gain to motor to its highest level since 2019

Cars.com ( NYSE: CARS ) soared to its highest level since July of 2019 following a Q4 earnings report that came in ahead of expectations.

Revenue was up 6.1% to $168.2M. Dealer revenue growth was driven by 28% growth in Dealer Inspire, the continued adoption of the Accu-Trade Connected solution, and a 2% increase in dealer customers. Solid growth in dealer and other revenue was partially offset by a 7% decline in OEM and national segment revenue, reflective of OEMs continued production challenges resulting in lower advertising investments.

Adjusted EBITDA rose 5.8% to $49.5M. Average monthly unique visitors and traffic were both 5% year-over-tear during the quarter.

On the balance sheet, the Chicago-based company paid down $41.3M in debt during 2022 to offset most of the $45M borrowed in Q1 of 2022 to partially fund the acquisition of Accu-Trade. Total debt outstanding was $481.3M as of December 31 and total net leverage improved to 2.4X, placing the company within its target net leverage range of 2.0X to 2.5X.

Shares of CARS were up 11.39% at 10:45 a.m. on Wednesday.

The Seeking Alpha Quant Rating on CARS flipped to Buy from Hold on February 6 ahead of the earnings report.

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