TrueCar (NASDAQ:TRUE – Get Free Report) and Bumble (NASDAQ:BMBL – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Volatility and Risk
TrueCar has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500. Comparatively, Bumble has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.
Insider and Institutional Ownership
79.4% of TrueCar shares are owned by institutional investors. Comparatively, 94.8% of Bumble shares are owned by institutional investors. 3.3% of TrueCar shares are owned by company insiders. Comparatively, 7.8% of Bumble 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.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TrueCar | 0 | 0 | 3 | 0 | 3.00 |
| Bumble | 1 | 14 | 3 | 0 | 2.11 |
TrueCar currently has a consensus target price of $4.50, suggesting a potential upside of 20.32%. Bumble has a consensus target price of $8.50, suggesting a potential upside of 16.28%. Given TrueCar’s stronger consensus rating and higher probable upside, research analysts plainly believe TrueCar is more favorable than Bumble.
Earnings and Valuation
This table compares TrueCar and Bumble”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TrueCar | $158.71 million | 2.14 | -$49.77 million | ($0.32) | -11.69 |
| Bumble | $1.09 billion | 0.85 | -$4.21 million | $0.17 | 43.00 |
Bumble has higher revenue and earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than Bumble, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares TrueCar and Bumble’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TrueCar | -17.63% | -14.10% | -11.03% |
| Bumble | 3.93% | 1.82% | 1.18% |
Summary
Bumble beats TrueCar on 9 of the 13 factors compared between the two stocks.
About TrueCar
TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. The company was incorporated in 2005 and is headquartered in Santa Monica, California.
About Bumble
Bumble Inc. provides online dating and social networking platforms in North America, Europe, internationally. It owns and operates websites and applications that offers subscription and in-app purchases dating products. The company operates apps, including Bumble, a dating app built with women at the center, where women make the first move; Badoo, the web and mobile free-to-use dating app; Official app where users connect their profile with that of their partner enabling a shared, linked product experience; Bumble BFF and Bumble Bizz Modes that have a format similar to the date mode requiring users to set up profiles and matching users through yes and no votes, similar to the dating platform; and Bumble for Friends, a friendship app where people in all stages of life can meet people nearby and create meaningful platonic connections, as well as Fruitz app is centered around encouraging honesty and transparency by sharing dating intentions from the first touch point. Bumble Inc. was founded in 2006 in and is headquartered in Austin, Texas.
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