Investment Thesis
Cars.com (CARS) has been on a rally these past few months. I contend that investors had long ago braced themselves for negative results in Q2, but that Cars.com is still highly cash flow generative.
When Cars.com reported its Q2 results, investors were reassured that, although its revenue took a significant hit, Cars.com was still able to generate strong cash flows.
I surmise that the stock is still cheaply valued at less than 8x this year's free cash flow.
***Note: An edited version of this article showed up first in my Marketplace***