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

Profitability

This table compares TrueCar and IAC/InterActiveCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TrueCar -9.86% -11.00% -8.49%
IAC/InterActiveCorp 7.66% 9.16% 4.00%

Insider and Institutional Ownership

91.7% of TrueCar shares are held by institutional investors. Comparatively, 85.2% of IAC/InterActiveCorp shares are held by institutional investors. 15.5% of TrueCar shares are held by insiders. Comparatively, 10.6% of IAC/InterActiveCorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for TrueCar and IAC/InterActiveCorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueCar 1 2 7 0 2.60
IAC/InterActiveCorp 0 1 18 0 2.95

TrueCar currently has a consensus price target of $18.50, suggesting a potential upside of 10.05%. IAC/InterActiveCorp has a consensus price target of $109.61, suggesting a potential downside of 4.34%. Given TrueCar’s higher probable upside, research analysts plainly believe TrueCar is more favorable than IAC/InterActiveCorp.

Earnings & Valuation

This table compares TrueCar and IAC/InterActiveCorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TrueCar $306.80 million 5.40 -$16.51 million ($0.35) -48.03
IAC/InterActiveCorp $3.10 billion 2.95 $448.71 million $2.66 43.08

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

Volatility and Risk

TrueCar has a beta of 3, suggesting that its stock price is 200% more volatile than the S&P 500. Comparatively, IAC/InterActiveCorp has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Summary

IAC/InterActiveCorp beats TrueCar on 8 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 IAC/InterActiveCorp

IAC/InterActiveCorp (IAC) is a media and Internet company. The Company’s brands include HomeAdvisor, Vimeo, Dictionary.com and Match Group’s online dating portfolio, which includes Tinder, PlentyOfFish and OkCupid. Its segments include Match Group, HomeAdvisor, Video, Applications and Publishing. Match Group includes the dating and non-dating businesses of Match Group, Inc. HomeAdvisor is a home services digital marketplace that helps connect consumers with home professionals in North America, as well as in France, the Netherlands and Italy under various brands. Its Video consists of Vimeo, Electus, CollegeHumor, Notional, IAC Films and Daily Burn. Applications consists of Consumer, which include its direct-to-consumer downloadable desktop applications, Apalon, which houses its mobile applications and SlimWare, and Partnerships, which includes its business-to-business partnership operations. Publishing consists of Premium Brands business, and Ask & Other business.

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