Critical Review: Innodata (INOD) versus CarGurus (CARG)

Innodata (NASDAQ:INOD) and CarGurus (NASDAQ:CARG) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Earnings & Valuation

This table compares Innodata and CarGurus’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Innodata $60.93 million 0.61 -$5.05 million N/A N/A
CarGurus $316.86 million 14.83 $13.19 million $0.12 357.67

CarGurus has higher revenue and earnings than Innodata.

Insider & Institutional Ownership

22.6% of Innodata shares are owned by institutional investors. Comparatively, 63.4% of CarGurus shares are owned by institutional investors. 13.4% of Innodata shares are owned by insiders. Comparatively, 51.0% of CarGurus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Innodata and CarGurus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innodata -6.59% -5.57% -3.65%
CarGurus 10.34% 12.60% 6.57%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Innodata and CarGurus, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innodata 0 0 0 0 N/A
CarGurus 0 2 5 0 2.71

CarGurus has a consensus target price of $43.20, indicating a potential upside of 0.65%. Given CarGurus’ higher possible upside, analysts plainly believe CarGurus is more favorable than Innodata.

Summary

CarGurus beats Innodata on 10 of the 10 factors compared between the two stocks.

About Innodata

Innodata Inc., a digital services and solutions company, provides technology solutions and services worldwide. The company operates through three segments: Digital Data Solutions (DDS), Innodata Advanced Data Solutions (IADS), and Media Intelligence Solutions (MIS). The DDS segment produces and distributes e-books; develops new digital information products; and provides operational support services for existing digital information products and systems, including content aggregation, extraction, encoding, indexing and abstracting, fabrication, and distribution. The IADS segment offers services that enable clients in the financial services, insurance, medical, and healthcare sectors to enhance decision-support through digital technologies. This segment provides APS.Extract for use with life insurance underwriting and claims; and docGenix system that extracts and classifies data from unstructured legal documents to enhance an organization's ability to analyze documentation and feed actionable data to downstream applications. The MIS segment provides media monitoring and analysis solutions, and professional services; and publishes Bulldog Reporter's Daily Dog, a daily e-newsletter; and Inside Health Media, a daily online newsletter, as well as offers media list and media intelligence services. This segment's technology platform monitors, aggregates, analyzes, and distributes content across traditional and digital media. The company serves publishers, media and information companies, digital retailers, banks, insurance companies, government agencies, and other industries through its professional staff, senior management, and direct sales personnel. Innodata Inc. was founded in 1988 and is headquartered in Ridgefield Park, New Jersey.

About CarGurus

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars worldwide. The company's marketplace enables users with third-party validation on pricing, dealer reputation, and other information. As of June 30, 2017, it had an active dealer network of approximately 40,000 dealers; and approximately 5.4 million car listings. The company was founded in 2005 and is headquartered in Cambridge, Massachusetts..

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