Head to Head Survey: NerdWallet (NASDAQ:NRDS) versus Cars.com (NYSE:CARS)

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

Valuation & Earnings

This table compares Cars.com and NerdWallet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cars.com	$719.15 million	1.03	$118.44 million	$0.72	16.13
NerdWallet	$687.60 million	0.98	-$11.80 million	$0.40	22.78

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

Insider and Institutional Ownership

89.2% of Cars.com shares are owned by institutional investors. Comparatively, 38.8% of NerdWallet shares are owned by institutional investors. 2.1% of Cars.com shares are owned by insiders. Comparatively, 45.9% of NerdWallet shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cars.com	5.46%	9.99%	4.33%
NerdWallet	4.42%	-2.08%	-1.73%

Risk and Volatility

Cars.com has a beta of 2.16, indicating that its share price is 116% more volatile than the S&P 500. Comparatively, NerdWallet has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Cars.com and NerdWallet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cars.com	0	2	3	0	2.60
NerdWallet	0	1	4	0	2.80

Cars.com currently has a consensus target price of $20.50, indicating a potential upside of 76.54%. NerdWallet has a consensus target price of $17.00, indicating a potential upside of 86.61%. Given NerdWallet’s stronger consensus rating and higher probable upside, analysts clearly believe NerdWallet is more favorable than Cars.com.

Summary

Cars.com beats NerdWallet on 9 of the 14 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 NerdWallet

NerdWallet, Inc. operates a digital platform that provides consumer-driven advice about personal finance by connecting individuals and small and mid-sized businesses with financial products providers in the United States, the United Kingdom, Australia, and Canada. Its platform offers guidance to consumers through educational content, tools and calculators, and product marketplaces, as well as through NerdWallet app for various financial products, including credit cards, mortgages, insurance, SMB products, personal loans, banking, investing, and student loans. The company was founded in 2009 and is based in San Francisco, California.