B.Riley FBR Assigns a Buy Rating on Cars com Inc

B.Riley FBR analyst Sameet Sinha assigned a Buy rating to Cars com Inc (NYSE: CARS) today and set a price target of $37. The company’s shares opened today at $26.65.

Sinha wrote:

“We also believe a PE deal would be the base case for valuation and note that a strategic industry player should be able to garner revenue and cost synergies and hence should be willing to pay a higher amount. The one relative unknown is tax law as it relates to maintaining the tax-free status of the spin from TGNA last year. According to the spin-off tax code, we believe CARS can make the argument that the spin off occurred purely for a corporate business purpose and not to facilitate an acquisition (IRS Section 355). In TEGNA’s filing announcing the spin off, the company explicitly lists the strategic rationale for the spin, which we view as adequate for preserving the tax-free spin-off ruling the company received when CARS spun out last year.”

According to TipRanks.com, Sinha is a 4-star analyst with an average return of 5.7% and a 52.5% success rate. Sinha covers the Technology sector, focusing on stocks such as Digital Turbine Inc, Limelight Networks, and Alphabet Inc.

Currently, the analyst consensus on Cars com Inc is Strong Buy and the average price target is $37.83, representing a 42.0% upside.

In a report released yesterday, D.A. Davidson also maintained a Buy rating on the stock with a $34 price target.

See today’s analyst top recommended stocks >>

Based on Cars com Inc’s latest earnings release for the quarter ending March 31, the company reported a quarterly net profit of $929K. In comparison, last year the company had a net profit of $26.89 million.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

Cars.com, Inc. engages in the provision of automotive products and services through online automotive classifieds. It offers a digital automotive marketplace search engine which connects buyers and sellers. It also sells online subscription advertising products to car dealerships.