Cars.com (NYSE:CARS) versus Adit EdTech Acquisition (NYSE:ADEX) Critical Analysis

Cars.com (NYSE:CARS) and Adit EdTech Acquisition (NYSE:ADEX) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Cars.com and Adit EdTech Acquisition, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cars.com	0	1	3	0	2.75
Adit EdTech Acquisition	0	0	0	0	N/A

Cars.com currently has a consensus price target of $24.00, suggesting a potential upside of 21.83%. Given Cars.com’s higher possible upside, analysts plainly believe Cars.com is more favorable than Adit EdTech Acquisition.

Volatility & Risk

Cars.com has a beta of 2.15, meaning that its share price is 115% more volatile than the S&P 500. Comparatively, Adit EdTech Acquisition has a beta of -0.23, meaning that its share price is 123% less volatile than the S&P 500.

Earnings & Valuation

This table compares Cars.com and Adit EdTech Acquisition’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cars.com	$689.18 million	1.89	$118.44 million	$1.57	12.55
Adit EdTech Acquisition	$19.62 million	2.44	-$18.66 million	N/A	N/A

Cars.com has higher revenue and earnings than Adit EdTech Acquisition.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cars.com	15.34%	22.28%	9.57%
Adit EdTech Acquisition	N/A	N/A	-41.90%

Institutional & Insider Ownership

89.2% of Cars.com shares are held by institutional investors. Comparatively, 0.8% of Adit EdTech Acquisition shares are held by institutional investors. 2.1% of Cars.com shares are held by insiders. Comparatively, 0.3% of Adit EdTech Acquisition shares are held 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.

Summary

Cars.com beats Adit EdTech Acquisition on 10 of the 11 factors compared between the two stocks.

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.

About Adit EdTech Acquisition

Adit EdTech Acquisition Corp. does not have significant operations. It focuses on effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities. Adit EdTech Acquisition Corp. was incorporated in 2020 and is based in New York, New York. Adit EdTech Acquisition Corp. operates as a subsidiary of Adit Edtech Sponsor, LLC.