Head to Head Comparison: CarGurus (CARG) and Ooma (OOMA)

CarGurus (NASDAQ:CARG) and Ooma (NYSE:OOMA) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility & Risk

CarGurus has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500. Comparatively, Ooma has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Insider and Institutional Ownership

72.1% of CarGurus shares are owned by institutional investors. Comparatively, 75.4% of Ooma shares are owned by institutional investors. 34.5% of CarGurus shares are owned by insiders. Comparatively, 10.5% of Ooma shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares CarGurus and Ooma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CarGurus 13.10% 15.03% 10.97%
Ooma -11.28% -39.40% -17.84%

Valuation and Earnings

This table compares CarGurus and Ooma’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CarGurus $454.09 million 8.86 $65.17 million $0.57 63.68
Ooma $129.23 million 2.10 -$14.57 million ($0.69) -19.06

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for CarGurus and Ooma, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CarGurus 0 0 10 0 3.00
Ooma 0 1 3 0 2.75

CarGurus currently has a consensus price target of $49.90, indicating a potential upside of 37.47%. Ooma has a consensus price target of $17.83, indicating a potential upside of 35.61%. Given CarGurus’ stronger consensus rating and higher probable upside, equities analysts plainly believe CarGurus is more favorable than Ooma.

Summary

CarGurus beats Ooma on 13 of the 14 factors compared between the two stocks.

CarGurus Company Profile

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars in the United States, Canada, the United Kingdom, Germany, Italy, and Spain. The company provides consumers an online automotive marketplace where they can search for new and used car listings from its dealers, as well as sell their car in the United States marketplace. Its marketplace connects dealers to a large audience of informed and engaged consumers. The company was founded in 2005 and is headquartered in Cambridge, Massachusetts.

Ooma Company Profile

Ooma, Inc. provides communications solutions and other connected services to small business, home, and mobile users in the United States and Canadian markets. The company's Ooma Office, a multi-user communications system comprise an on-premise appliance and Ooma Linx end-point device that wirelessly connects regular desktop telephones and fax machines to the user's high-speed Internet connection; and Ooma Office Mobile HD app, which allows users to make, receive, and transfer phone calls. Its Ooma Telo, a home communications solution includes Ooma Premier Service, a suite of advanced calling features that have been designed to enhance the capabilities of Ooma Telo on a monthly or annual subscription basis; and Ooma Mobile HD app, which allows users to make and receive phone calls and access Ooma features and settings with iOS or Android device over a Wi-Fi or cellular data connection. In addition, the company offers Ooma Telo Air, a wireless device that connects to the Internet using the home's Wi-Fi network and can be paired with mobile phones to answer incoming mobile calls from phone in the home; Ooma handset, a Cordless handset; Wireless + bluetooth adapter, which allows users to install the Ooma Telo device anywhere in the home within range of their wireless network; and Safety phone, a wireless hands-free speakerphone that can be worn as a pendant. Further, it provides Ooma Home, a do-it-yourself home security solution; and Talkatone, a mobile app. The company offers its products through direct sales, retailers, and online, as well as through distributors and reseller partnership channels. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.

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