NerdWallet (NASDAQ:NRDS – Get Free Report) and Cars.com (NYSE:CARS – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for NerdWallet and Cars.com, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NerdWallet | 0 | 1 | 4 | 0 | 2.80 |
| Cars.com | 0 | 2 | 3 | 0 | 2.60 |
NerdWallet currently has a consensus price target of $17.00, suggesting a potential upside of 82.40%. Cars.com has a consensus price target of $19.90, suggesting a potential upside of 69.77%. Given NerdWallet’s stronger consensus rating and higher possible upside, analysts plainly believe NerdWallet is more favorable than Cars.com.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NerdWallet | $687.60 million | 1.00 | -$11.80 million | $0.40 | 23.30 |
| Cars.com | $719.15 million | 1.04 | $118.44 million | $0.72 | 16.28 |
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.
Profitability
This table compares NerdWallet and Cars.com’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NerdWallet | 4.42% | -2.08% | -1.73% |
| Cars.com | 5.46% | 9.99% | 4.33% |
Risk & Volatility
NerdWallet has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Cars.com has a beta of 2.16, suggesting that its stock price is 116% more volatile than the S&P 500.
Institutional & Insider Ownership
38.8% of NerdWallet shares are owned by institutional investors. Comparatively, 89.2% of Cars.com shares are owned by institutional investors. 45.9% of NerdWallet 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 hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summary
Cars.com beats NerdWallet on 9 of the 14 factors compared between the two stocks.
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.
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.
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