Financial Comparison: NIC (EGOV) vs. TrueCar (TRUE)
NIC (NASDAQ: EGOV) and TrueCar (NASDAQ:TRUE) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.
Insider & Institutional Ownership
92.9% of NIC shares are owned by institutional investors. Comparatively, 91.7% of TrueCar shares are owned by institutional investors. 4.1% of NIC shares are owned by insiders. Comparatively, 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
NIC has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, TrueCar has a beta of 3, suggesting that its stock price is 200% more volatile than the S&P 500.
This is a breakdown of current ratings and price targets for NIC and TrueCar, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NIC currently has a consensus price target of $19.33, suggesting a potential upside of 13.73%. TrueCar has a consensus price target of $18.50, suggesting a potential upside of 20.05%. Given TrueCar’s stronger consensus rating and higher possible upside, analysts plainly believe TrueCar is more favorable than NIC.
This table compares NIC and TrueCar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
NIC pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. TrueCar does not pay a dividend. NIC pays out 38.1% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares NIC and TrueCar’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NIC||$327.22 million||3.44||$83.34 million||$0.84||20.24|
|TrueCar||$306.80 million||4.95||-$16.51 million||($0.35)||-44.03|
NIC has higher revenue and earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than NIC, indicating that it is currently the more affordable of the two stocks.
NIC beats TrueCar on 8 of the 15 factors compared between the two stocks.
NIC Inc. is a provider of digital government services that help governments use technology to provide services to businesses and citizens. The Company operates through Outsourced Portals segment. The Company offers its services through two channels: primary outsourced portal businesses, and software and services businesses. In the primary outsourced portal businesses, the Company enters into contracts with state and local governments to design, build, and operate Internet-based, enterprise-wide portals on their behalf. Its software and services businesses include its subsidiaries that provide software development and payment processing services, other than outsourced portal services, to state and local governments, as well as federal agencies. The Company’s outsourced portal businesses include interactive government services (IGS), driver history records (DHR), Portal software development and services, and Portal management.
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.
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