Financial Contrast: TrueCar (TRUE) vs. 58.com (WUBA)

TrueCar (NASDAQ: TRUE) and 58.com (NYSE:WUBA) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Institutional and Insider Ownership

91.7% of TrueCar shares are owned by institutional investors. Comparatively, 60.0% of 58.com shares are owned by institutional investors. 15.5% of TrueCar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

TrueCar has a beta of 3, indicating that its share price is 200% more volatile than the S&P 500. Comparatively, 58.com has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for TrueCar and 58.com, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueCar 1 2 7 0 2.60
58.com 3 4 6 0 2.23

TrueCar currently has a consensus price target of $18.50, suggesting a potential upside of 10.84%. 58.com has a consensus price target of $53.10, suggesting a potential downside of 20.21%. Given TrueCar’s stronger consensus rating and higher possible upside, equities analysts clearly believe TrueCar is more favorable than 58.com.

Profitability

This table compares TrueCar and 58.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TrueCar -9.86% -11.00% -8.49%
58.com 2.14% 1.04% 0.72%

Earnings & Valuation

This table compares TrueCar and 58.com’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TrueCar $306.80 million 5.36 -$16.51 million ($0.35) -47.69
58.com $1.31 billion 7.40 $225.01 million $0.17 391.47

58.com has higher revenue and earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than 58.com, indicating that it is currently the more affordable of the two stocks.

Summary

58.com beats TrueCar on 7 of the 13 factors compared between the two stocks.

About TrueCar

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.

About 58.com

58.com Inc. is a holding company. The Company’s business consists of its online classifieds and listing platforms. Its online classifieds and listings platforms enable local merchants and consumers to connect, share information and conduct business in China. These platforms include 58, Ganji and Anjuke. 58 and Ganji are online multi-content category-classified advertising platforms, while Anjuke is an online real estate listing platform. In addition, 58 Daojia Inc., its subsidiary, operates a mobile-based closed-loop transactional platform for home services, which directly connects consumers and individual service providers for local services, such as home cleaning, moving services and manicure services provided at home. Its classifieds and listing platforms contain local information for over 480 cities across various content categories, including jobs, real estate, used goods, automotive and yellow pages. It also offers membership, online marketing services and e-commerce services.

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