Contrasting CarGurus (NASDAQ:CARG) and Castlight Health (NASDAQ:CSLT)

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

Valuation and Earnings

This table compares CarGurus and Castlight Health’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CarGurus $588.92 million 4.63 $42.15 million $0.38 63.64
Castlight Health $143.31 million 0.88 -$40.00 million ($0.25) -3.36

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

Risk and Volatility

CarGurus has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500. Comparatively, Castlight Health has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Institutional & Insider Ownership

76.9% of CarGurus shares are held by institutional investors. Comparatively, 53.3% of Castlight Health shares are held by institutional investors. 24.4% of CarGurus shares are held by company insiders. Comparatively, 17.1% of Castlight Health 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.

Profitability

This table compares CarGurus and Castlight Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CarGurus 6.91% 16.97% 11.13%
Castlight Health -58.42% -18.61% -13.24%

Analyst Ratings

This is a breakdown of current ratings and price targets for CarGurus and Castlight Health, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CarGurus 0 3 7 0 2.70
Castlight Health 1 2 0 0 1.67

CarGurus presently has a consensus target price of $29.63, indicating a potential upside of 22.49%. Castlight Health has a consensus target price of $1.42, indicating a potential upside of 68.65%. Given Castlight Health’s higher possible upside, analysts plainly believe Castlight Health is more favorable than CarGurus.

Summary

CarGurus beats Castlight Health on 13 of the 14 factors compared between the two stocks.

CarGurus Company Profile

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars in the United States, Canada, the United Kingdom, Germany, Italy, and Spain. The company provides consumers an online automotive marketplace where they can search for new and used car listings from its dealers, as well as sell their car in the United States marketplace. Its marketplace connects dealers to a large audience of informed and engaged consumers. The company was founded in 2005 and is headquartered in Cambridge, Massachusetts.

Castlight Health Company Profile

Castlight Health, Inc. provides a software-as-a-service platform used for health benefits navigation for employees in the United States. Its platform matches employees to the resources their employers make available to them; managing a condition; and assists them to manage their benefits. The company also offers implementation, user and customer support, and marketplace services. It serves customers in a range of industries, including education, manufacturing, retail, technology, and government. The company was formerly known as Ventana Health Services and changed its name to Castlight Health, Inc. in April 2010. Castlight Health, Inc. was founded in 2008 and is headquartered in San Francisco, California.

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