Cars.com, LLC (CARS) Stock on a Surge in Aftermarket, Here’s the Reason

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Cars.com, LLC (CARS), a company that operates as a digital marketplace, and provides solutions for the automotive industry, has surged 9.69% in aftermarket trading session. Consequently, CARS stock is trading at $14.60 at the time of the writing. The increase was attributable to the addition of the company in S&P SmallCap 600. On Thursday, CARS closed the day at $13.31 after gaining a slight increase of 0.075% during regular trading hours.

Why CARS Stock Surging?

On Thursday, CARS announced that it would replace DSP Group Inc. (DSPG) in the S&P SmallCap 600. The move came after it was announced by Synaptics Inc. (SYNP) that it would be acquiring DSPG in a deal that would be expected to complete on 2nd December 2021. As a result, the replacement of CARS with DSPG in S&P SmallCap 600 would complete on 2nd December as well.

Q3 2021 Financial Results

On 4th November, CARS reported the financial results for the third quarter of the fiscal year 2021. The quarter ended on 30th September 2021. The company generated total revenue of $156.55 million during the quarter against $144.39 million for the same period of 2020. The total operating expenses bore by the company during the period were $144.47 million against $125.32 million for the same period of 2020. The net income generated by the company during the period was $2.43 million (or $0.04 and $0.03 per basic and diluted share respectively) against the net loss of $12.26 million (or $0.18 per basic and diluted share) for the same period of 2020.

Executive Commentary

Alex Vetter, President and Chief Executive Officer of CARS, while commenting on the results said that the company’s revenue continues to grow along a steep trajectory. He assured shareholders that going forward; the company hopes to strengthen the capabilities of its platforms as it continually looks to bring expansion into its business model.

Future Outlook for CARS

The last few months have seen a steady increase in the value of CARS stock. The stock has increased by more than 10% during the last three months. On a broader scale, however, the last one and a half years have not proved excellent for CARS as the pandemic was wreaking havoc. However, the company believes that the recent performance would build investor confidence in the company.

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