Head to Head Comparison: Cars.com (CARS) versus Leaf Group (LFGR)

Cars.com (NYSE: CARS) and Leaf Group (NYSE:LFGR) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of recent ratings and target prices for Cars.com and Leaf Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cars.com 0 1 2 0 2.67
Leaf Group 0 1 4 0 2.80

Cars.com presently has a consensus price target of $34.00, indicating a potential upside of 26.77%. Leaf Group has a consensus price target of $10.30, indicating a potential upside of 26.38%. Given Cars.com’s higher possible upside, analysts plainly believe Cars.com is more favorable than Leaf Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Cars.com N/A N/A N/A
Leaf Group -25.98% -44.59% -34.40%

Valuation & Earnings

This table compares Cars.com and Leaf Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cars.com N/A N/A N/A N/A N/A
Leaf Group $113.45 million 1.50 -$2.01 million ($1.58) -5.16

Cars.com has higher earnings, but lower revenue than Leaf Group.

Institutional & Insider Ownership

63.4% of Leaf Group shares are held by institutional investors. 47.6% of Leaf Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Leaf Group beats Cars.com on 5 of the 9 factors compared between the two stocks.

Cars.com Company Profile

Cars.com Inc. owns a digital automotive marketplace business (Cars.com). Cars.com is an online research destination for car shoppers. The Company is engaged in the sale of online subscription advertising products targeting car dealerships. It offers a suite of products and services targeting the automotive needs of its buyer and seller customers. Cars.com offers a digital automotive marketplace search engine that helps car buyers to make informed purchasing decisions and helps sellers to engage with a portion of their target customer base. This online automotive marketplace service connects buyers and sellers across five Websites: Cars.com, Auto.com, DealerRater.com, NewCars.com and PickupTrucks.com. Its automotive marketplace products also include credible user and automotive and dealer reviews. It is also engaged in the sale of display advertising to national advertisers. Car buyers and car owners interface with Cars.com primarily through the Cars.com sites and mobile applications.

Leaf Group Company Profile

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

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