Analyzing TrueCar (NASDAQ:TRUE) and Health Catalyst (NASDAQ:HCAT)

TrueCar (NASDAQ:TRUE) and Health Catalyst (NASDAQ:HCAT) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Profitability

This table compares TrueCar and Health Catalyst’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TrueCar -11.76% -5.73% -4.47%
Health Catalyst -48.17% -25.57% -14.56%

Valuation and Earnings

This table compares TrueCar and Health Catalyst’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TrueCar $353.88 million 1.29 -$54.89 million ($0.39) -11.21
Health Catalyst $154.94 million 11.95 -$60.10 million ($1.42) -30.68

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

Risk & Volatility

TrueCar has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, Health Catalyst has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for TrueCar and Health Catalyst, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueCar 0 4 4 0 2.50
Health Catalyst 0 0 9 1 3.10

TrueCar presently has a consensus price target of $5.05, suggesting a potential upside of 15.56%. Health Catalyst has a consensus price target of $42.00, suggesting a potential downside of 3.60%. Given TrueCar’s higher possible upside, analysts clearly believe TrueCar is more favorable than Health Catalyst.

Insider and Institutional Ownership

91.8% of TrueCar shares are owned by institutional investors. Comparatively, 81.5% of Health Catalyst shares are owned by institutional investors. 4.2% of TrueCar shares are owned by company insiders. Comparatively, 22.1% of Health Catalyst shares are owned by company 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.

Summary

TrueCar beats Health Catalyst on 10 of the 15 factors compared between the two stocks.

About TrueCar

TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides geographically specific real-time pricing information for consumers and dealers; TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; DealerSync, a dealer website creation and management service and a software platform that assists dealers in managing, marketing, and growing their business; and DealerScience that provides dealers with advanced digital retailing software tools. Further, the company customizes and operates its platform for financial institutions, membership-based organizations, and large enterprises. The company was formerly known as Zag.com Inc. TrueCar, Inc. was founded in 2005 and is headquartered in Santa Monica, California.

About Health Catalyst

Health Catalyst, Inc. provides data and analytics technology and services to healthcare organizations. Its solutions include a cloud-based data platform, analytics software, and professional services. The company was founded in 2008 and is headquartered in Salt Lake City, Utah.

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