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Cars.Com Inc

CARSStrike zoneExpectations · modest

Held by 1 superinvestor.

Price$10.21
Margin of safety−50%
Holders1
Total value$163,083

SEC 10-K · fundamentals

Business quality

As of 2025-12-31

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

Revenue growth
+0.6%
Net margin
2.8%
ROE
4.2%
FCF margin
20.4%
Revenue $547.5M → $723.2M · 6y
What makes a business high quality

Valuation · value band

Margin of safety

$20/ sh · growth-anchored intrinsic value
margin of safety
fair value
above fair value
$10
cheaperpricier

Zero-growth floor

$14

Central IV

$20

Optimistic top

$24

Cars.Com Inc (CARS): A conservative value band $14–$24 / sh (zero-growth floor to growth-capped optimistic top); central read about $20. Today’s price sits below that band (price $10 as of 2026-10-16).

The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.

Revenue growth 0% (lower of historical trend and fundamental cap, capped by moat) · moat 10 yr · discount 10.9% · Zero-growth downside $14

Price as of 2026-10-16 · yahoo · DGS10 5.1% @ 2026-10-15.

Method & numbers

Model cautions

  • Owner-earnings yield diverges sharply from the 10-year Treasury (over 300 bps).

A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.

Owner-earnings DCF $18.41 – $22.95 · Greenwald zero-growth $24.46 · zero-growth base $24.46 · reproduction $1.91

Moat Franchise (moat) · terminal value 35% of present value · owner-earnings yield 22% vs 10Y 5.1%.

Graham earnings-power value (normalized NOPAT)$14.40 – $19.23 / sh

Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 2127% (> 50%); estimate is degraded. Share-based compensation is left as a real expense (not added back).

Buffett owner-earnings value$20.07 – $24.46 / sh

Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 9.1–11.1% band (9–11% base + 0.1pp leverage premium). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Net income is below its multi-year average (cyclical/declining): normalized owner earnings anchored to the latest year — no peak-earnings capitalization (audit #2). Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 2127% (> 50%); estimate is degraded. One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% base band plus a 0.1pp leverage premium (cost of equity rises with leverage — MM Proposition II). Net debt is about 3.3 years of owner earnings, adding 0.1pp of cost-of-equity risk premium.

Asset floor: Reproduction value = tangible net assets + acquired-intangible reset proxy, ÷ diluted shares; tangible net assets alone are negative for this asset-light franchise (no R&D history to capitalize).

Moat reading: Franchise test compares earnings power (EPV) against reproduction value (tangible net assets + capitalized R&D). EPV well above reproduction value signals a moat; near it, a commodity; below it, value destruction. A directional reading, not a verdict.

Assumes a narrow moat · competitive-advantage period ≈ 10 years.

Growth value not assessable — No positive growth reinvestment in the matured window, so ROIIC cannot be computed.

Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 0% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.

Baseline 9%–11%, net debt ≈ 3.3 years of owner earnings → +0.1pp cost-of-equity premium → effective 9.1%–11.1%.

Owner-earnings DCF: growth g₁ 0% · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 9.73%–12.13% (DGS10 +4.5% to a 12% strict end, each +0.13pp for leverage premium, as of 2026-10-15). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp.

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

What the price is betting

Today's price pencils in about under -10.0% (outside the usual range) a year in owner-earnings for the next few years. Revenue actually grew 5.5% a year.

Below what it has already done.

Roughly, the price needs its historical revenue growth to run about 1 more years to hold up.

How to read intrinsic value

SEC 13F · holders

Superinvestors Holding This Security

1 holder · $163,083 combined · this quarter +1 opened / -0 exited

This quarter1 opened

SEC 13F · notes

Written summary

Cars.Com Inc (CARS) is held by 1 of the superinvestors tracked on Compounder, with a combined $163,083 in reported 13F value. The largest position belongs to Jeremy Grantham, where it makes up 0.0% of the portfolio.

In the quarter ended 2026-06-30, 1 of the tracked filers opened a new position in CARS, 0 added to existing ones, 0 trimmed, and 0 sold out entirely.

Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.

How to read a 13F

SEC 13F · co-ownership

Also held by these investors

Investors holding Cars.Com Inc (CARS) also commonly hold →

CARS's price sits below its conservative value band. See the full strike-zone list

Also on

Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-13

Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.

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