IAC/InterActiveCorp (NASDAQ: IAC) and Care.com (NYSE:CRCM) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares IAC/InterActiveCorp and Care.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IAC/InterActiveCorp 7.66% 9.16% 4.00%
Care.com 3.66% 10.98% 4.67%

Volatility and Risk

IAC/InterActiveCorp has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Care.com has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

85.2% of IAC/InterActiveCorp shares are held by institutional investors. Comparatively, 73.7% of Care.com shares are held by institutional investors. 10.6% of IAC/InterActiveCorp shares are held by insiders. Comparatively, 24.7% of Care.com shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for IAC/InterActiveCorp and Care.com, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IAC/InterActiveCorp 0 1 18 0 2.95
Care.com 0 1 1 0 2.50

IAC/InterActiveCorp currently has a consensus target price of $113.22, suggesting a potential downside of 3.71%. Care.com has a consensus target price of $14.00, suggesting a potential downside of 11.89%. Given IAC/InterActiveCorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe IAC/InterActiveCorp is more favorable than Care.com.

Valuation and Earnings

This table compares IAC/InterActiveCorp and Care.com’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IAC/InterActiveCorp $3.10 billion 3.02 $448.71 million $2.66 44.20
Care.com $169.64 million 2.79 $8.45 million $0.10 158.92

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

Summary

IAC/InterActiveCorp beats Care.com on 10 of the 14 factors compared between the two stocks.

IAC/InterActiveCorp Company Profile

IAC/InterActiveCorp (IAC) is a media and Internet company. The Company’s brands include HomeAdvisor, Vimeo, Dictionary.com and Match Group’s online dating portfolio, which includes Tinder, PlentyOfFish and OkCupid. Its segments include Match Group, HomeAdvisor, Video, Applications and Publishing. Match Group includes the dating and non-dating businesses of Match Group, Inc. HomeAdvisor is a home services digital marketplace that helps connect consumers with home professionals in North America, as well as in France, the Netherlands and Italy under various brands. Its Video consists of Vimeo, Electus, CollegeHumor, Notional, IAC Films and Daily Burn. Applications consists of Consumer, which include its direct-to-consumer downloadable desktop applications, Apalon, which houses its mobile applications and SlimWare, and Partnerships, which includes its business-to-business partnership operations. Publishing consists of Premium Brands business, and Ask & Other business.

Care.com Company Profile

Care.com, Inc. is an online marketplace for finding and managing family care. As of December 31, 2016, the Company had 22.8 million members, including 12.9 million families and 9.9 million caregivers, spanning 19 countries. Its consumer matching solutions allow families to search for, qualify, vet, connect with and select caregivers. It also provides caregivers with solutions to create personal profiles, describe their skills and experience, and otherwise differentiate and market themselves in a fragmented marketplace. In addition to consumer matching solutions, the Company offers its members products and services to facilitate their interaction with caregivers. It serves employers by providing access to certain of its products and services to employer-sponsored families. In addition, it serves care-related businesses, such as day care centers, nanny agencies and home care agencies, willing to market their services to its care-seeking families and recruit its caregiver members.

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