Reviewing CarGurus (NASDAQ:CARG) and Verisk Analytics (NASDAQ:VRSK)

CarGurus (NASDAQ:CARG) and Verisk Analytics (NASDAQ:VRSK) are both auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Volatility and Risk

CarGurus has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Verisk Analytics has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Insider & Institutional Ownership

86.9% of CarGurus shares are held by institutional investors. Comparatively, 90.0% of Verisk Analytics shares are held by institutional investors. 17.2% of CarGurus shares are held by company insiders. Comparatively, 0.4% of Verisk Analytics shares are held by company 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.

Analyst Recommendations

This is a breakdown of recent ratings for CarGurus and Verisk Analytics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarGurus	0	3	7	0	2.70
Verisk Analytics	0	7	6	1	2.57

CarGurus presently has a consensus target price of $29.25, indicating a potential upside of 4.17%. Verisk Analytics has a consensus target price of $273.54, indicating a potential downside of 0.20%. Given CarGurus’ stronger consensus rating and higher possible upside, research analysts plainly believe CarGurus is more favorable than Verisk Analytics.

Earnings and Valuation

This table compares CarGurus and Verisk Analytics’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CarGurus	$877.03 million	3.34	$31.10 million	$0.28	100.29
Verisk Analytics	$2.78 billion	14.09	$614.60 million	$5.36	51.14

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

Profitability

This table compares CarGurus and Verisk Analytics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CarGurus	-5.57%	11.06%	7.25%
Verisk Analytics	32.03%	252.11%	20.18%

Summary

Verisk Analytics beats CarGurus on 9 of the 15 factors compared between the two stocks.

About CarGurus

CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale. The company provides an online automotive marketplace where customers can search for new and used car listings from its dealers and sell their car to dealers and other consumers; and paid listings subscriptions for enhanced access to its marketplace that connects dealers to a large audience of informed and engaged consumers. It also offers dealer and non-dealer advertising products for its websites and social media platforms. The company operates online marketplaces under the CarGurus brand in the United States, Canada, and the United Kingdom; Autolist and CarOffer brands in the United States; and PistonHeads brand in the United Kingdom. The company was formerly known as CarGurus LLC and changed its name to CarGurus, Inc. in June 2015. CarGurus, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.

About Verisk Analytics

Verisk Analytics, Inc. provides data analytics and technology solutions to the insurance markets in the United States and internationally. It offers policy language, prospective loss costs, policy writing and rating rules, and various underwriting solutions for risk selection and segmentation, pricing, and workflow optimization; property- and auto- specific rating and underwriting information solutions that allows clients to understand, quantify, underwrite, mitigate, and avoid potential loss for risks; catastrophe modeling solutions, which enables companies to identify, quantify, and plan for the financial consequences of catastrophes for use by insurers, reinsurers, intermediaries, financial institutions, and governments. The company also provides life insurance solutions for transforming current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling; Marketing Solutions, such as compliant, real-time decisioning, profitability, and risk assessment for inbound consumer interactions; and international underwriting and claims solutions. In addition, it offers claims insurance solutions, which provides analytics in fraud detection, compliance reporting, subrogation liability assessment, litigation, and repair cost estimation and valuation solutions; and casualty solutions, such as compliance, casualty claims decision support, and workflow automation solutions. Further, the company supplies software to the specialty insurance market. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.