TrueCar (NASDAQ:TRUE – Get Free Report) and Sohu.com (NASDAQ:SOHU – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.
Valuation and Earnings
This table compares TrueCar and Sohu.com”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TrueCar | $175.60 million | 1.12 | -$31.05 million | ($0.22) | -10.05 |
| Sohu.com | $598.40 million | 0.81 | -$100.27 million | $5.01 | 3.22 |
Analyst Ratings
This is a breakdown of recent ratings and target prices for TrueCar and Sohu.com, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TrueCar | 2 | 5 | 0 | 0 | 1.71 |
| Sohu.com | 0 | 1 | 2 | 0 | 2.67 |
TrueCar currently has a consensus price target of $2.65, suggesting a potential upside of 19.91%. Sohu.com has a consensus price target of $20.00, suggesting a potential upside of 23.99%. Given Sohu.com’s stronger consensus rating and higher probable upside, analysts plainly believe Sohu.com is more favorable than TrueCar.
Profitability
This table compares TrueCar and Sohu.com’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% |
| Sohu.com | 25.92% | -4.20% | -2.55% |
Institutional & Insider Ownership
79.4% of TrueCar shares are held by institutional investors. Comparatively, 33.0% of Sohu.com shares are held by institutional investors. 3.9% of TrueCar shares are held by company insiders. Comparatively, 21.1% of Sohu.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility & Risk
TrueCar has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, Sohu.com has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.
Summary
Sohu.com beats TrueCar on 10 of the 14 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 Sohu.com
Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.
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