Financial Survey: Cars.com (NYSE:CARS) vs. LY (OTCMKTS:YAHOY)

LY (OTCMKTS:YAHOY) and Cars.com (NYSE:CARS) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Volatility & Risk

LY has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Cars.com has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LY	10.60%	5.85%	2.04%
Cars.com	4.16%	18.32%	8.30%

Valuation & Earnings

This table compares LY and Cars.com”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LY	$12.59 billion	1.48	$1.01 billion	$0.40	13.58
Cars.com	$719.15 million	0.92	$48.19 million	$0.46	24.08

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

Analyst Ratings

This is a summary of current recommendations for LY and Cars.com, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LY	0	2	0	0	2.00
Cars.com	0	3	4	0	2.57

Cars.com has a consensus target price of $17.90, suggesting a potential upside of 61.63%. Given Cars.com’s stronger consensus rating and higher possible upside, analysts plainly believe Cars.com is more favorable than LY.

Institutional & Insider Ownership

89.2% of Cars.com shares are owned by institutional investors. 2.1% of Cars.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Cars.com beats LY on 10 of the 14 factors compared between the two stocks.

About LY

LY Corporation engages in the online advertising and e-commerce businesses in Japan. The company provides LINE, a communication app; and Yahoo! JAPAN, an internet service that offers search, news, weather, shopping, auction, and other services. It also offers reuse, membership, and payment-related services. The company was formerly known as Z Holdings Corporation and changed its name to LY Corporation in October 2023. LY Corporation was founded in 1996 and is headquartered in Chiyoda, Japan. LY Corporation operates as a subsidiary of A Holdings Corporation.

About Cars.com

Cars.com Inc., through its subsidiaries, operates as a digital automotive marketplace that connects local car dealers to consumers in the United States. The company offers a suite of digital solutions that creates connections between individuals researching cars or looking to purchase a car with car dealerships and automotive original equipment manufacturers. It also sells online subscription advertising products to car dealerships by its direct sales force, as well as through its affiliate sales channel. In addition, the company sells display advertising to national advertisers. Further, it offers online automotive marketplace service that connects buyers and sellers through Cars.com, Auto.com, DealerRater.com, NewCars.com, PickupTrucks.com, DealerInspire.com, and LaunchDigitalMarketing.com Websites. Its platform hosts approximately 4.9 million new and used vehicle listings and serves approximately 20,000 franchise and independent car dealers. Cars.com Inc. was founded in 1998 and is headquartered in Chicago, Illinois.