TrueCar (NASDAQ: TRUE) and Liberty TripAdvisor Holdings (NASDAQ:LTRPA) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitabiliy, institutional ownership, analyst recommendations, dividends and risk.

Insider & Institutional Ownership

83.6% of TrueCar shares are owned by institutional investors. Comparatively, 95.7% of Liberty TripAdvisor Holdings shares are owned by institutional investors. 17.3% of TrueCar shares are owned by insiders. Comparatively, 4.0% of Liberty TripAdvisor Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for TrueCar and Liberty TripAdvisor Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueCar 1 2 7 0 2.60
Liberty TripAdvisor Holdings 0 1 0 0 2.00

TrueCar currently has a consensus target price of $17.06, indicating a potential downside of 14.55%. Given TrueCar’s stronger consensus rating and higher possible upside, equities research analysts plainly believe TrueCar is more favorable than Liberty TripAdvisor Holdings.

Volatility and Risk

TrueCar has a beta of 3.02, meaning that its stock price is 202% more volatile than the S&P 500. Comparatively, Liberty TripAdvisor Holdings has a beta of 2.27, meaning that its stock price is 127% more volatile than the S&P 500.

Profitability

This table compares TrueCar and Liberty TripAdvisor Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TrueCar -12.64% -13.82% -10.50%
Liberty TripAdvisor Holdings 1.87% 0.54% 0.39%

Earnings & Valuation

This table compares TrueCar and Liberty TripAdvisor Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TrueCar $291.40 million 6.36 -$20.73 million ($0.43) -46.42
Liberty TripAdvisor Holdings $1.55 billion 0.55 $238.00 million $0.39 29.36

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

Summary

Liberty TripAdvisor Holdings beats TrueCar on 7 of the 13 factors compared between the two stocks.

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.

About Liberty TripAdvisor Holdings

Liberty TripAdvisor Holdings, Inc. is a holding company. Through its interests in subsidiaries and other companies, the Company is primarily engaged in the online travel research and online commerce industries. The Company’s subsidiaries include TripAdvisor, Inc. (TripAdvisor), which owns and operates a portfolio of online travel brands, and BuySeasons, Inc., which owns and operates BuyCostumes.com and the Celebrate Express (BuySeasons) family of Websites. TripAdvisor is a travel site focusing on helping people around the world to plan and book a trip. TripAdvisor manages its business in two segments: Hotel, including click-based advertising, display-based advertising and subscription-based advertising, and Non-Hotel, including its attractions, restaurants and vacation rental businesses. BuySeasons is an online retailer and supplier of costumes, accessories, seasonal decor and party supplies.

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