Care.com (NYSE: CRCM) and TrueCar (NASDAQ:TRUE) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.
This table compares Care.com and TrueCar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Care.com and TrueCar’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Care.com||$169.64 million||2.53||$8.45 million||$0.10||144.31|
|TrueCar||$306.80 million||4.95||-$16.51 million||($0.35)||-44.03|
Care.com has higher revenue, but lower earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than Care.com, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Care.com has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, TrueCar has a beta of 3, suggesting that its stock price is 200% more volatile than the S&P 500.
Institutional & Insider Ownership
73.7% of Care.com shares are held by institutional investors. Comparatively, 91.7% of TrueCar shares are held by institutional investors. 24.7% of Care.com shares are held by insiders. Comparatively, 15.5% of TrueCar shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings and price targets for Care.com and TrueCar, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Care.com currently has a consensus price target of $14.00, indicating a potential downside of 2.98%. TrueCar has a consensus price target of $18.50, indicating a potential upside of 20.05%. Given TrueCar’s stronger consensus rating and higher probable upside, analysts clearly believe TrueCar is more favorable than Care.com.
TrueCar beats Care.com on 7 of the 13 factors compared between the two stocks.
Care.com, Inc. is an online marketplace for finding and managing family care. As of December 31, 2016, the Company had 22.8 million members, including 12.9 million families and 9.9 million caregivers, spanning 19 countries. Its consumer matching solutions allow families to search for, qualify, vet, connect with and select caregivers. It also provides caregivers with solutions to create personal profiles, describe their skills and experience, and otherwise differentiate and market themselves in a fragmented marketplace. In addition to consumer matching solutions, the Company offers its members products and services to facilitate their interaction with caregivers. It serves employers by providing access to certain of its products and services to employer-sponsored families. In addition, it serves care-related businesses, such as day care centers, nanny agencies and home care agencies, willing to market their services to its care-seeking families and recruit its caregiver members.
TrueCar, Inc. is an Internet-based information, technology, and communication services company. The Company has a data-driven online platform, which features market data and analytics. The Company-branded platform is available on its TrueCar Website and mobile applications. It customizes and operates its platform on a co-branded basis for its affinity group marketing partners, including financial institutions, membership-based organizations, and employee buying programs for a range of enterprises. The Company enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar Certified Dealers. Its network of over 13,000 TrueCar Certified Dealers consists primarily of new car franchises, as well as independent dealers selling used vehicles. Its subsidiary, ALG, Inc., provides forecasts and consulting services regarding determination of the residual value of an automobile at given future points in time.
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