TrueCar (TRUE) versus Connecture (CNXR) Financial Survey

TrueCar (NASDAQ: TRUE) and Connecture (OTCMKTS:CNXR) are both small-cap technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TrueCar $277.51 million 4.26 -$41.70 million ($0.35) -33.74
Connecture $81.89 million 0.10 -$26.53 million ($0.67) -0.51

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueCar 0 3 5 0 2.63
Connecture 0 0 0 0 N/A

TrueCar currently has a consensus target price of $17.50, indicating a potential upside of 48.18%. Given TrueCar’s higher probable upside, research analysts clearly believe TrueCar is more favorable than Connecture.

Institutional & Insider Ownership

92.2% of TrueCar shares are owned by institutional investors. Comparatively, 38.4% of Connecture shares are owned by institutional investors. 15.5% of TrueCar shares are owned by company insiders. Comparatively, 68.6% of Connecture shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
TrueCar -10.29% -10.38% -8.12%
Connecture -19.38% N/A -17.70%

Volatility and Risk

TrueCar has a beta of 2.7, suggesting that its stock price is 170% more volatile than the S&P 500. Comparatively, Connecture has a beta of 1.93, suggesting that its stock price is 93% more volatile than the S&P 500.

Summary

TrueCar beats Connecture on 9 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 Connecture

Connecture, Inc. provides a Web-based consumer shopping, enrollment and retention platform for health insurance distribution. The Company caters its services to health insurance marketplace operators, such as health plans, brokers and exchange operators. It operates through four segments: Enterprise/Commercial, Enterprise/State, Medicare and Private Exchange. The Enterprise/Commercial segment offers insurance distribution solutions to health plans. The Enterprise/State segment offers the sales automation solutions to state Governments, which allow its customers to offer customized individual and small group exchanges. The Medicare segment offers Web-based Medicare plan comparison, prescription drug comparison and enrollment tools for health plans, pharmacy benefit managers, pharmacies, field marketing organizations and call centers. The Private Exchange segment offers defined-contribution benefit exchange solutions to benefit consultants, brokers, exchange operators and aggregators.

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