Comparing Cars.com (NYSE:CARS) & Zillow Group (NASDAQ:ZG)

Cars.com (NYSE:CARS) and Zillow Group (NASDAQ:ZG) are both communication services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cars.com	$723.24 million	0.87	$20.05 million	$0.57	20.52
Zillow Group	$2.81 billion	2.71	$23.00 million	$0.22	153.91

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

Institutional & Insider Ownership

89.2% of Cars.com shares are owned by institutional investors. Comparatively, 20.3% of Zillow Group shares are owned by institutional investors. 3.4% of Cars.com shares are owned by company insiders. Comparatively, 29.9% of Zillow Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Cars.com has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500. Comparatively, Zillow Group has a beta of 2.02, meaning that its stock price is 102% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cars.com and Zillow Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cars.com	0	4	3	1	2.62
Zillow Group	1	12	10	0	2.39

Cars.com presently has a consensus target price of $14.58, suggesting a potential upside of 24.70%. Zillow Group has a consensus target price of $51.10, suggesting a potential upside of 50.90%. Given Zillow Group’s higher probable upside, analysts plainly believe Zillow Group is more favorable than Cars.com.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cars.com	4.73%	18.82%	8.31%
Zillow Group	1.96%	2.32%	1.97%

Summary

Zillow Group beats Cars.com on 8 of the 15 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 Zillow Group

Zillow Group, Inc. operates real estate brands in mobile applications and Websites in the United States. The company offers premier agent and rentals marketplaces, new construction marketplaces, advertising, display advertising, and business technology solutions, as well as dotloop and floor plans. It also provides mortgage originations and the sale of mortgages, and advertising to mortgage lenders and other mortgage professionals; and title and escrow services. In addition, the company's brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, and Out East; and a suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce, and Follow Up Boss. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.