Cars.com (NYSE:CARS – Get Free Report) and TripAdvisor (NASDAQ:TRIP – Get Free Report) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.
Institutional and Insider Ownership
89.2% of Cars.com shares are held by institutional investors. Comparatively, 99.0% of TripAdvisor shares are held by institutional investors. 2.4% of Cars.com shares are held by company insiders. Comparatively, 3.1% of TripAdvisor shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Cars.com and TripAdvisor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cars.com | 2.77% | 17.31% | 7.77% |
| TripAdvisor | 2.12% | 10.67% | 2.52% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cars.com | 1 | 3 | 4 | 0 | 2.38 |
| TripAdvisor | 5 | 7 | 4 | 0 | 1.94 |
Cars.com currently has a consensus price target of $16.00, indicating a potential upside of 50.76%. TripAdvisor has a consensus price target of $14.68, indicating a potential upside of 28.87%. Given Cars.com’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Cars.com is more favorable than TripAdvisor.
Risk and Volatility
Cars.com has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, TripAdvisor has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.
Valuation and Earnings
This table compares Cars.com and TripAdvisor”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cars.com | $723.24 million | 0.86 | $20.05 million | $0.32 | 33.17 |
| TripAdvisor | $1.89 billion | 0.69 | $40.00 million | $0.30 | 37.97 |
TripAdvisor has higher revenue and earnings than Cars.com. Cars.com is trading at a lower price-to-earnings ratio than TripAdvisor, indicating that it is currently the more affordable of the two stocks.
Summary
Cars.com beats TripAdvisor on 8 of the 13 factors compared between the two stocks.
About Cars.com
Cars.com Inc., through its subsidiaries, operates as a digital automotive marketplace that connects local car dealers to consumers in the United States. The company offers a suite of digital solutions that creates connections between individuals researching cars or looking to purchase a car with car dealerships and automotive original equipment manufacturers. It also sells online subscription advertising products to car dealerships by its direct sales force, as well as through its affiliate sales channel. In addition, the company sells display advertising to national advertisers. Further, it offers online automotive marketplace service that connects buyers and sellers through Cars.com, Auto.com, DealerRater.com, NewCars.com, PickupTrucks.com, DealerInspire.com, and LaunchDigitalMarketing.com Websites. Its platform hosts approximately 4.9 million new and used vehicle listings and serves approximately 20,000 franchise and independent car dealers. Cars.com Inc. was founded in 1998 and is headquartered in Chicago, Illinois.
About TripAdvisor
TripAdvisor, Inc. operates as an online travel company, primarily engages in the provision of travel guidance products and services worldwide. The company operates in three segments: Brand Tripadvisor, Viator, and TheFork. The Brand Tripadvisor segment offers travel guidance platforms for travelers to discover, generate, and share authentic user-generated content in the form of ratings and reviews for destinations, points-of-interest, experiences, accommodations, restaurants, and cruises. The Viator's segment provides pure-play experiences online travel agency that comprehensive and connecting travelers to discover and book tours, activities, and attractions from experience operators. TheFork segment provides an online marketplace that enables diners to discover and book online reservations at restaurants. TripAdvisor, Inc. was founded in 2000 and is headquartered in Needham, Massachusetts. Tripadvisor, Inc. is a subsidiary of Liberty TripAdvisor Holdings, Inc.
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