Cars.com (NYSE:CARS) and MercadoLibre (NASDAQ:MELI) Critical Contrast

MercadoLibre (NASDAQ:MELI) and Cars.com (NYSE:CARS) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for MercadoLibre and Cars.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MercadoLibre	0	3	14	1	2.89
Cars.com	0	3	4	0	2.57

MercadoLibre presently has a consensus target price of $2,872.00, suggesting a potential upside of 43.83%. Cars.com has a consensus target price of $17.90, suggesting a potential upside of 55.86%. Given Cars.com’s higher possible upside, analysts clearly believe Cars.com is more favorable than MercadoLibre.

Risk and Volatility

MercadoLibre has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, Cars.com has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Institutional and Insider Ownership

87.6% of MercadoLibre shares are owned by institutional investors. Comparatively, 89.2% of Cars.com shares are owned by institutional investors. 0.3% of MercadoLibre shares are owned by company insiders. Comparatively, 2.4% of Cars.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MercadoLibre	7.93%	39.03%	6.78%
Cars.com	4.16%	18.32%	8.30%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MercadoLibre	$20.78 billion	4.87	$1.91 billion	$40.98	48.73
Cars.com	$719.15 million	0.96	$48.19 million	$0.46	24.97

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

Summary

MercadoLibre beats Cars.com on 10 of the 15 factors compared between the two stocks.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.

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.