Leaf Group (NASDAQ:LFGR) and TrueCar (TRUE) Financial Comparison

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for TrueCar and Leaf Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TrueCar 1 2 7 0 2.60
Leaf Group 0 1 4 0 2.80

TrueCar currently has a consensus target price of $18.50, indicating a potential upside of 16.06%. Leaf Group has a consensus target price of $10.30, indicating a potential upside of 52.59%. Given Leaf Group’s stronger consensus rating and higher probable upside, analysts clearly believe Leaf Group is more favorable than TrueCar.

Insider and Institutional Ownership

83.7% of TrueCar shares are held by institutional investors. 17.3% of TrueCar shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares TrueCar and Leaf Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TrueCar $306.80 million 5.12 -$16.51 million ($0.35) -45.54
Leaf Group $117.85 million 1.17 -$21.14 million N/A N/A

TrueCar has higher revenue and earnings than Leaf Group.

Profitability

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

Net Margins Return on Equity Return on Assets
TrueCar -9.86% -11.83% -8.99%
Leaf Group -36.78% -53.54% -42.55%

Summary

TrueCar beats Leaf Group on 9 of the 11 factors compared between the two stocks.

TrueCar Company Profile

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.

Leaf Group Company Profile

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

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