Cars.com (NYSE:CARS – Get Free Report) and NerdWallet (NASDAQ:NRDS – Get Free Report) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, risk, dividends, analyst recommendations and institutional ownership.
Profitability
This table compares Cars.com and NerdWallet’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cars.com | 5.46% | 9.99% | 4.33% |
| NerdWallet | 4.42% | -2.08% | -1.73% |
Volatility & Risk
Cars.com has a beta of 2.16, suggesting that its share price is 116% more volatile than the S&P 500. Comparatively, NerdWallet has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cars.com | 0 | 2 | 3 | 0 | 2.60 |
| NerdWallet | 0 | 1 | 4 | 0 | 2.80 |
Cars.com currently has a consensus price target of $20.50, indicating a potential upside of 76.54%. NerdWallet has a consensus price target of $17.00, indicating a potential upside of 86.61%. Given NerdWallet’s stronger consensus rating and higher probable upside, analysts plainly believe NerdWallet is more favorable than Cars.com.
Insider & Institutional Ownership
89.2% of Cars.com shares are owned by institutional investors. Comparatively, 38.8% of NerdWallet shares are owned by institutional investors. 2.1% of Cars.com shares are owned by insiders. Comparatively, 45.9% of NerdWallet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Cars.com and NerdWallet”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cars.com | $719.15 million | 1.03 | $118.44 million | $0.72 | 16.13 |
| NerdWallet | $687.60 million | 0.98 | -$11.80 million | $0.40 | 22.78 |
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.
Summary
Cars.com beats NerdWallet on 9 of the 14 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 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.
Receive News & Ratings for Cars.com Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cars.com and related companies with MarketBeat.com's FREE daily email newsletter.
