Critical Review: Adit EdTech Acquisition (NYSE:ADEX) vs. Cars.com (NYSE:CARS)

Adit EdTech Acquisition (NYSE:ADEX) and Cars.com (NYSE:CARS) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Valuation and Earnings

This table compares Adit EdTech Acquisition and Cars.com’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adit EdTech Acquisition	$19.62 million	2.44	-$18.66 million	N/A	N/A
Cars.com	$689.18 million	1.82	$118.44 million	$1.57	12.10

Cars.com has higher revenue and earnings than Adit EdTech Acquisition.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Adit EdTech Acquisition and Cars.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adit EdTech Acquisition	0	0	0	0	N/A
Cars.com	0	1	3	0	2.75

Cars.com has a consensus price target of $24.00, suggesting a potential upside of 26.32%. Given Cars.com’s higher probable upside, analysts clearly believe Cars.com is more favorable than Adit EdTech Acquisition.

Risk and Volatility

Adit EdTech Acquisition has a beta of -0.32, meaning that its stock price is 132% less volatile than the S&P 500. Comparatively, Cars.com has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500.

Institutional and Insider Ownership

0.8% of Adit EdTech Acquisition shares are owned by institutional investors. Comparatively, 89.2% of Cars.com shares are owned by institutional investors. 0.3% of Adit EdTech Acquisition shares are owned by company insiders. Comparatively, 2.1% of Cars.com 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Adit EdTech Acquisition	N/A	N/A	-41.90%
Cars.com	15.34%	22.28%	9.57%

Summary

Cars.com beats Adit EdTech Acquisition on 10 of the 11 factors compared between the two stocks.

About Adit EdTech Acquisition

Adit EdTech Acquisition Corp. does not have significant operations. It focuses on effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities. Adit EdTech Acquisition Corp. was incorporated in 2020 and is based in New York, New York. Adit EdTech Acquisition Corp. operates as a subsidiary of Adit Edtech Sponsor, LLC.

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.