Cruises: Analyst Praises Strong Q1 Results And Organic Traffic Growth

  • Barrington Research reiterated an Outperform rating on the shares of Inc CARS with a price target of $25.
  • The company’s Q1 results included revenue of $167.1 million and adjusted EBITDA of $44.3 million, beating the analyst consensus estimates.
  • Results for the quarter were in line with management’s guidance that called for a revenue range of $166-168 million with an adjusted EBITDA margin range of 25-27%, equating to an adjusted EBITDA range of $41.5-45.4 million.
  • The analyst said that financial results were a function of strength in the marketplace business, website growth, the addition of Accu-Trade, and media product upsells that all contributed to a 4% year-over-year increase in ARPD.
  • Due to strong organic traffic growth, was able to spend less on marketing and sales than originally planned while allocating more resources to product development initiatives, added the analyst.
  • The analyst noted that during Q1/23, introduced new marketplace subscription packages that combine tools and services that enable dealers to better leverage the company’s platform capabilities.
  • The analyst noted subscription pricing was aligned with the enhanced value of new packages and the overall reception has been positive within the dealer base.
  • Accu-Trade is also seeing strong engagement from dealers and consumers, with Vehicle appraisals increasing by 70% sequentially, with more than 600 dealers connected to Accu-Trade.
  • Price Action: CARS shares are trading higher by 2.56% at $18.59 on the last check Wednesday.
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