Head to Head Analysis: TrueCar (TRUE) vs. Autohome (ATHM)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Autohome and TrueCar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autohome 0 0 4 0 3.00
TrueCar 1 2 7 0 2.60

Autohome presently has a consensus price target of $58.33, suggesting a potential downside of 11.39%. TrueCar has a consensus price target of $18.50, suggesting a potential upside of 10.65%. Given TrueCar’s higher possible upside, analysts clearly believe TrueCar is more favorable than Autohome.

Earnings and Valuation

This table compares Autohome and TrueCar’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Autohome $958.29 million 7.97 $233.45 million $1.87 35.20
TrueCar $306.80 million 5.37 -$16.51 million ($0.35) -47.77

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

Profitability

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

Net Margins Return on Equity Return on Assets
Autohome 23.17% 22.64% 15.55%
TrueCar -9.86% -11.00% -8.49%

Insider and Institutional Ownership

40.2% of Autohome shares are held by institutional investors. Comparatively, 91.7% of TrueCar shares are held by institutional investors. 5.7% of Autohome shares are held by insiders. Comparatively, 15.5% of TrueCar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Autohome has a beta of 2.19, indicating that its share price is 119% more volatile than the S&P 500. Comparatively, TrueCar has a beta of 3, indicating that its share price is 200% more volatile than the S&P 500.

Summary

Autohome beats TrueCar on 8 of the 13 factors compared between the two stocks.

About Autohome

Autohome Inc. is an online destination for automobile consumers in China. The Company is engaged in the provision of online advertising and dealer subscription services in the People’s Republic of China (PRC). The Company, through its Websites, autohome.com.cn and che168.com, and mobile applications, delivers content to automobile buyers and owners. These services are offered to automakers and dealers, and advertising agencies that represent automakers and dealers in the automobile industry. The Company’s autohome.com.cn targets automobile consumers with a focus on new automobiles. The Company’s professionally produced content is created by editorial team and includes automobile-related articles and reviews, pricing trends in various local markets, and photos and video clips. Its database also includes new and used automobile listings and promotional information. Its dealer subscription services allow dealers to market their inventory and services through its Websites.

About TrueCar

TrueCar, Inc. is an Internet-based information, technology, and communication services company. The Company has a data-driven online platform, which features market data and analytics. The Company-branded platform is available on its TrueCar Website and mobile applications. It customizes and operates its platform on a co-branded basis for its affinity group marketing partners, including financial institutions, membership-based organizations, and employee buying programs for a range of enterprises. The Company enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar Certified Dealers. Its network of over 13,000 TrueCar Certified Dealers consists primarily of new car franchises, as well as independent dealers selling used vehicles. Its subsidiary, ALG, Inc., provides forecasts and consulting services regarding determination of the residual value of an automobile at given future points in time.

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