TrueCar (NASDAQ:TRUE) & Marchex (NASDAQ:MCHX) Head-To-Head Comparison

Marchex (NASDAQ:MCHX) and TrueCar (NASDAQ:TRUE) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Institutional and Insider Ownership

73.5% of Marchex shares are owned by institutional investors. Comparatively, 79.4% of TrueCar shares are owned by institutional investors. 23.5% of Marchex shares are owned by company insiders. Comparatively, 3.9% of TrueCar shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Marchex and TrueCar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marchex	1	1	0	0	1.50
TrueCar	2	5	0	0	1.71

TrueCar has a consensus price target of $2.65, indicating a potential upside of 4.33%. Given TrueCar’s stronger consensus rating and higher probable upside, analysts clearly believe TrueCar is more favorable than Marchex.

Earnings and Valuation

This table compares Marchex and TrueCar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marchex	$46.49 million	1.49	-$4.95 million	($0.11)	-14.27
TrueCar	$181.22 million	1.25	-$31.05 million	($0.22)	-11.55

Marchex has higher earnings, but lower revenue than TrueCar. Marchex is trading at a lower price-to-earnings ratio than TrueCar, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Marchex and TrueCar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marchex	-10.38%	-13.57%	-10.40%
TrueCar	-10.27%	-23.76%	-18.02%

Volatility & Risk

Marchex has a beta of 2.03, meaning that its share price is 103% more volatile than the S&P 500. Comparatively, TrueCar has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500.

Summary

TrueCar beats Marchex on 7 of the 13 factors compared between the two stocks.

About Marchex

Marchex, Inc., a conversation intelligence company, provides conversational analytics and related solutions in the United States, Canada, and internationally. Its products include Marketing Edge that identifies which campaigns and channels are driving inbound conversations, evaluates what happens during those conversations, and closes the sales loop by connecting converted sales to marketing driven leads; Sonar Business Text Messaging, an artificial intelligence (AI) empowered intelligent workflow enabled mobile messaging solution that enables operations, sales, and marketing teams to communicate personally with field staff, prospects, and customers; Marchex Platform Services, a robust API-based conversation intelligence product that allows executives, sales, customer engagement, and marketing teams to apply Marchex AI to most any calls, regardless of communication platform, in order to identify actionable insights from conversations with their customers; Spotlight, an AI conversation analytics product for multi-location businesses; and Engage, a solution that provides locations with applications to enhance their overall performance. The company was incorporated in 2003 and is headquartered in Seattle, Washington.

About TrueCar

TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. The company was incorporated in 2005 and is headquartered in Santa Monica, California.