TrueCar (NASDAQ: TRUE) and Connecture (OTCMKTS:CNXR) are both small-cap technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.
Valuation & Earnings
This table compares TrueCar and Connecture’s revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Connecture has lower revenue, but higher earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than Connecture, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for TrueCar and Connecture, as provided by MarketBeat.com.
||Strong Buy Ratings
TrueCar presently has a consensus target price of $17.50, suggesting a potential upside of 49.44%. Given TrueCar’s higher probable upside, research analysts clearly believe TrueCar is more favorable than Connecture.
Institutional & Insider Ownership
92.2% of TrueCar shares are owned by institutional investors. Comparatively, 38.4% of Connecture shares are owned by institutional investors. 15.5% of TrueCar shares are owned by insiders. Comparatively, 68.6% of Connecture shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares TrueCar and Connecture’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Volatility & Risk
TrueCar has a beta of 2.7, meaning that its share price is 170% more volatile than the S&P 500. Comparatively, Connecture has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500.
TrueCar beats Connecture on 9 of the 13 factors compared between the two stocks.
TrueCar Company Profile
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.
Connecture Company Profile
Connecture, Inc. provides a Web-based consumer shopping, enrollment and retention platform for health insurance distribution. The Company caters its services to health insurance marketplace operators, such as health plans, brokers and exchange operators. It operates through four segments: Enterprise/Commercial, Enterprise/State, Medicare and Private Exchange. The Enterprise/Commercial segment offers insurance distribution solutions to health plans. The Enterprise/State segment offers the sales automation solutions to state Governments, which allow its customers to offer customized individual and small group exchanges. The Medicare segment offers Web-based Medicare plan comparison, prescription drug comparison and enrollment tools for health plans, pharmacy benefit managers, pharmacies, field marketing organizations and call centers. The Private Exchange segment offers defined-contribution benefit exchange solutions to benefit consultants, brokers, exchange operators and aggregators.
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