Head to Head Contrast: Inovalon (INOV) vs. Cars.com (CARS)

Inovalon (NASDAQ:INOV) and Cars.com (NYSE:CARS) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.

Valuation and Earnings

This table compares Inovalon and Cars.com’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inovalon $449.36 million 3.33 $34.81 million $0.23 42.65
Cars.com $626.26 million 2.72 $224.44 million $2.28 10.73

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Inovalon and Cars.com, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inovalon 1 1 0 0 1.50
Cars.com 0 1 3 0 2.75

Inovalon presently has a consensus price target of $12.00, suggesting a potential upside of 22.32%. Cars.com has a consensus price target of $37.50, suggesting a potential upside of 53.25%. Given Cars.com’s stronger consensus rating and higher probable upside, analysts clearly believe Cars.com is more favorable than Inovalon.

Volatility and Risk

Inovalon has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Cars.com has a beta of -0.2, indicating that its stock price is 120% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Inovalon -0.40% 3.69% 1.98%
Cars.com 28.90% 7.78% 4.89%

Insider and Institutional Ownership

33.9% of Inovalon shares are owned by institutional investors. 50.9% of Inovalon shares are owned by company insiders. Comparatively, 0.0% of Cars.com shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Cars.com beats Inovalon on 9 of the 14 factors compared between the two stocks.

Inovalon Company Profile

Inovalon Holdings, Inc., a technology company, provides cloud-based platforms empowering a data-driven transformation from volume-based to value-based models in the healthcare industry. The company's platform enables the assessment and enhancement of clinical and quality outcomes and financial performance. It serves health plans and provider organizations, as well as pharmaceutical, medical device, and diagnostics companies. The company provides technology that supports approximately 500 healthcare organizations. Its platforms are informed by data pertaining to approximately 932,000 physicians; 455,000 clinical facilities; and approximately 240 million individuals and 37 billion medical events. Inovalon Holdings, Inc. was founded in 1998 and is headquartered in Bowie, Maryland.

Cars.com Company Profile

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.

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