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

Profitability

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

Net Margins Return on Equity Return on Assets
Cars.com 19.24% 8.18% 6.29%
IAC/InterActiveCorp 11.81% 4.26% 1.98%

Insider & Institutional Ownership

86.7% of IAC/InterActiveCorp shares are owned by institutional investors. 10.6% of IAC/InterActiveCorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Cars.com and IAC/InterActiveCorp’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 $633.10 million 3.08 N/A N/A N/A
IAC/InterActiveCorp $3.14 billion 3.17 -$41.28 million $3.96 30.67

Cars.com has higher earnings, but lower revenue than IAC/InterActiveCorp.

Analyst Recommendations

This is a breakdown of recent recommendations for Cars.com and IAC/InterActiveCorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cars.com 0 1 2 0 2.67
IAC/InterActiveCorp 0 1 18 0 2.95

Cars.com currently has a consensus price target of $34.00, suggesting a potential upside of 24.72%. IAC/InterActiveCorp has a consensus price target of $141.47, suggesting a potential upside of 16.50%. Given Cars.com’s higher possible upside, equities research analysts clearly believe Cars.com is more favorable than IAC/InterActiveCorp.

Summary

IAC/InterActiveCorp beats Cars.com on 6 of the 10 factors compared between the two stocks.

Cars.com Company Profile

Cars.com Inc. owns a digital automotive marketplace business (Cars.com). Cars.com is an online research destination for car shoppers. The Company is engaged in the sale of online subscription advertising products targeting car dealerships. It offers a suite of products and services targeting the automotive needs of its buyer and seller customers. Cars.com offers a digital automotive marketplace search engine that helps car buyers to make informed purchasing decisions and helps sellers to engage with a portion of their target customer base. This online automotive marketplace service connects buyers and sellers across five Websites: Cars.com, Auto.com, DealerRater.com, NewCars.com and PickupTrucks.com. Its automotive marketplace products also include credible user and automotive and dealer reviews. It is also engaged in the sale of display advertising to national advertisers. Car buyers and car owners interface with Cars.com primarily through the Cars.com sites and mobile applications.

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.

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