Cango (NYSE:CANG) and TrueCar (NASDAQ:TRUE) Head to Head Survey

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

Risk & Volatility

TrueCar has a beta of 2.22, indicating that its share price is 122% more volatile than the S&P 500. Comparatively, Cango has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Valuation and Earnings

This table compares TrueCar and Cango”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrueCar	$181.22 million	1.25	-$31.05 million	($0.22)	-11.55
Cango	$688.08 million	0.12	-$621.95 million	($2.97)	-0.13

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

Institutional & Insider Ownership

79.4% of TrueCar shares are held by institutional investors. Comparatively, 4.2% of Cango shares are held by institutional investors. 3.9% of TrueCar shares are held by company insiders. Comparatively, 29.1% of Cango shares are held by company 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TrueCar	-10.27%	-23.76%	-18.02%
Cango	-83.92%	-49.13%	-24.42%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for TrueCar and Cango, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrueCar	1	5	0	0	1.83
Cango	2	0	1	1	2.25

TrueCar currently has a consensus price target of $2.65, suggesting a potential upside of 4.33%. Cango has a consensus price target of $3.00, suggesting a potential upside of 677.20%. Given Cango’s stronger consensus rating and higher probable upside, analysts clearly believe Cango is more favorable than TrueCar.

Summary

TrueCar beats Cango on 8 of the 15 factors compared between the two stocks.

About TrueCar

TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. The company was incorporated in 2005 and is headquartered in Santa Monica, California.

About Cango

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.