Veritone (NYSE: CARS) and Cars.com (NYSE:CARS) are both small-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Earnings & Valuation

This table compares Veritone and Cars.com’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veritone $14.41 million 14.47 -$59.60 million ($4.59) -2.48
Cars.com $626.26 million 3.02 $224.44 million $2.28 11.91

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

Insider and Institutional Ownership

9.3% of Veritone shares are owned by institutional investors. 37.0% of Veritone shares are owned by insiders. Comparatively, 0.0% of Cars.com shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Veritone and Cars.com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veritone 1 0 5 0 2.67
Cars.com 0 1 3 0 2.75

Veritone currently has a consensus price target of $21.83, suggesting a potential upside of 91.86%. Cars.com has a consensus price target of $37.50, suggesting a potential upside of 38.07%. Given Veritone’s higher probable upside, analysts clearly believe Veritone is more favorable than Cars.com.

Volatility and Risk

Veritone has a beta of -0.94, meaning that its stock price is 194% less volatile than the S&P 500. Comparatively, Cars.com has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Veritone -425.69% -98.44% -63.37%
Cars.com 28.90% 7.78% 4.89%

Summary

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

About Veritone

Veritone, Inc. provides artificial intelligence (AI) and computing solutions in the United States and the United Kingdom. It develops and operates aiWARE platform, an AI operating system that unlocks the power of cognitive computing to transform audio, video, and other unstructured data, as well as analyzes it in conjunction with structured data in an orchestrated and automated manner to generate actionable intelligence. The company also provides media advertising agency services, including media planning and strategy, media buying and placement, campaign messaging, clearance verification and attribution, and custom analytics directly to advertisers through outbound sales networking, and client and partner referrals, as well as indirectly through advertising agencies or marketing consultants. It serves media owners and broadcasters; legal and compliance markets, including consulting firms, managed services providers, large law firms and corporate legal departments, financial services, and healthcare and other companies; state, local, federal, and international law enforcement agencies, intelligence agencies, and other governmental agencies, as well as resellers and system integrators; and politics market, including political parties, elected officials and political campaigns, political action committees, and special interest groups. The company was formerly known as Veritone Delaware, Inc. and changed its name to Veritone, Inc. in July 2014. Veritone, Inc. was founded in 2014 and is headquartered in Costa Mesa, California.

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.

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