Bitauto Holdings Limited (NYSE: BITA) and TrueCar (NASDAQ:TRUE) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Bitauto Holdings Limited and TrueCar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bitauto Holdings Limited 0 0 2 0 3.00
TrueCar 1 2 7 0 2.60

Bitauto Holdings Limited currently has a consensus target price of $34.00, suggesting a potential downside of 2.77%. TrueCar has a consensus target price of $18.50, suggesting a potential upside of 11.78%. Given TrueCar’s higher probable upside, analysts plainly believe TrueCar is more favorable than Bitauto Holdings Limited.

Insider & Institutional Ownership

19.7% of Bitauto Holdings Limited shares are owned by institutional investors. Comparatively, 91.7% of TrueCar shares are owned by institutional investors. 15.5% of TrueCar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Bitauto Holdings Limited and TrueCar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bitauto Holdings Limited -4.76% 3.85% 1.60%
TrueCar -9.86% -11.00% -8.49%

Volatility & Risk

Bitauto Holdings Limited has a beta of 3.06, indicating that its stock price is 206% more volatile than the S&P 500. Comparatively, TrueCar has a beta of 2.97, indicating that its stock price is 197% more volatile than the S&P 500.

Earnings and Valuation

This table compares Bitauto Holdings Limited and TrueCar’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bitauto Holdings Limited $1.05 billion 2.33 $103.52 million ($1.21) -28.90
TrueCar $306.80 million 5.31 -$16.51 million ($0.35) -47.29

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

Summary

Bitauto Holdings Limited beats TrueCar on 7 of the 13 factors compared between the two stocks.

About Bitauto Holdings Limited

Bitauto Holdings Limited is a provider of Internet content and marketing services for China’s automotive industry. The Company’s bitauto.com and taoche.com Websites provide consumers with information on new and used automobile pricing, and promotional information, specifications, reviews and consumer feedback. The Company operates through three segments: advertising business, EP platform business and digital marketing solutions business. The advertising business offers a range of advertising services mainly to automakers through its Websites, as well as mobile applications. The EP platform business provides Web-based and mobile-based integrated digital marketing solutions to automobile customers in China. The digital marketing solutions business provides automakers with digital marketing solutions, including Website creation and maintenance, online public relations, online marketing campaigns and advertising agent services.

About TrueCar

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.

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