Zillow Group (NASDAQ:ZG – Get Free Report) and TrueCar (NASDAQ:TRUE – Get Free Report) are both communication services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.
Profitability
This table compares Zillow Group and TrueCar’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zillow Group | 1.96% | 2.32% | 1.97% |
| TrueCar | -10.27% | -23.76% | -18.02% |
Valuation & Earnings
This table compares Zillow Group and TrueCar”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zillow Group | $2.58 billion | 3.20 | $23.00 million | $0.22 | 167.18 |
| TrueCar | $181.22 million | 1.25 | -$31.05 million | ($0.22) | -11.55 |
Zillow Group has higher revenue and earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than Zillow Group, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and price targets for Zillow Group and TrueCar, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zillow Group | 1 | 13 | 11 | 0 | 2.40 |
| TrueCar | 1 | 4 | 0 | 0 | 1.80 |
Zillow Group presently has a consensus target price of $52.29, indicating a potential upside of 42.16%. TrueCar has a consensus target price of $2.55, indicating a potential upside of 0.39%. Given Zillow Group’s stronger consensus rating and higher possible upside, analysts clearly believe Zillow Group is more favorable than TrueCar.
Insider & Institutional Ownership
20.3% of Zillow Group shares are owned by institutional investors. Comparatively, 79.4% of TrueCar shares are owned by institutional investors. 29.9% of Zillow Group shares are owned by company insiders. Comparatively, 3.9% of TrueCar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
Zillow Group has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500. Comparatively, TrueCar has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500.
Summary
Zillow Group beats TrueCar on 12 of the 14 factors compared between the two stocks.
About Zillow Group
Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.
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 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; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. The company was incorporated in 2005 and is headquartered in Santa Monica, California.
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