Auto Trader Group (OTCMKTS:ATDRY) and Cars.com (NYSE:CARS) Critical Comparison

Auto Trader Group (OTCMKTS:ATDRY) and Cars.com (NYSE:CARS) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Valuation and Earnings

This table compares Auto Trader Group and Cars.com”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auto Trader Group	$766.77 million	8.62	$360.57 million	N/A	N/A
Cars.com	$719.15 million	1.02	$48.19 million	$0.46	26.54

Auto Trader Group has higher revenue and earnings than Cars.com.

Risk and Volatility

Auto Trader Group has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Cars.com has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Auto Trader Group	N/A	N/A	N/A
Cars.com	4.16%	18.32%	8.30%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Auto Trader Group and Cars.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auto Trader Group	2	0	1	0	1.67
Cars.com	0	3	4	0	2.57

Cars.com has a consensus price target of $17.70, indicating a potential upside of 44.96%. Given Cars.com’s stronger consensus rating and higher possible upside, analysts clearly believe Cars.com is more favorable than Auto Trader Group.

Institutional and Insider Ownership

0.0% of Auto Trader Group shares are owned by institutional investors. Comparatively, 89.2% of Cars.com shares are owned by institutional investors. 2.1% of Cars.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Cars.com beats Auto Trader Group on 9 of the 12 factors compared between the two stocks.

About Auto Trader Group

Auto Trader Group plc operates in the digital automotive marketplace in the United Kingdom and Ireland. The company provides vehicle advertisement on its websites for private sellers, as well as insurance and loan financing products to consumers; and display advertising on its websites for manufacturers and their advertising agencies. The company offers its products to retailers, home traders, and logistics firms. Auto Trader Group plc was founded in 1977 and is headquartered in Manchester, the United Kingdom.

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.