Reviewing Cars.com (CARS) and Care.com (CRCM)

Care.com (NYSE: CRCM) and Cars.com (NYSE:CARS) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Insider and Institutional Ownership

76.7% of Care.com shares are owned by institutional investors. 35.9% of Care.com shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Care.com and Cars.com, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Care.com 0 0 2 0 3.00
Cars.com 0 1 2 0 2.67

Care.com presently has a consensus price target of $16.00, suggesting a potential downside of 5.33%. Cars.com has a consensus price target of $35.33, suggesting a potential upside of 25.30%. Given Cars.com’s higher probable upside, analysts plainly believe Cars.com is more favorable than Care.com.

Profitability

This table compares Care.com and Cars.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Care.com 4.46% 17.27% 7.46%
Cars.com 19.24% 8.18% 6.29%

Valuation & Earnings

This table compares Care.com and Cars.com’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Care.com $161.75 million 3.14 $7.04 million $0.08 211.25
Cars.com $633.10 million 3.19 $176.37 million $1.70 16.59

Cars.com has higher revenue and earnings than Care.com. Cars.com is trading at a lower price-to-earnings ratio than Care.com, indicating that it is currently the more affordable of the two stocks.

Care.com Company Profile

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.

Cars.com Company Profile

Cars.com Inc. owns a digital automotive marketplace business (Cars.com). Cars.com is an online research destination for car shoppers. The Company is engaged in the sale of online subscription advertising products targeting car dealerships. It offers a suite of products and services targeting the automotive needs of its buyer and seller customers. Cars.com offers a digital automotive marketplace search engine that helps car buyers to make informed purchasing decisions and helps sellers to engage with a portion of their target customer base. This online automotive marketplace service connects buyers and sellers across five Websites: Cars.com, Auto.com, DealerRater.com, NewCars.com and PickupTrucks.com. Its automotive marketplace products also include credible user and automotive and dealer reviews. It is also engaged in the sale of display advertising to national advertisers. Car buyers and car owners interface with Cars.com primarily through the Cars.com sites and mobile applications.

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