CarGurus (NASDAQ:CARG) versus Digerati Technologies (OTCMKTS:DTGI) Financial Contrast

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

Analyst Recommendations

This is a summary of recent ratings and price targets for CarGurus and Digerati Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarGurus	0	4	5	0	2.56
Digerati Technologies	0	0	0	0	N/A

CarGurus currently has a consensus price target of $24.90, suggesting a potential upside of 6.09%. Given CarGurus’ higher probable upside, research analysts clearly believe CarGurus is more favorable than Digerati Technologies.

Profitability

This table compares CarGurus and Digerati Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CarGurus	3.40%	7.74%	5.21%
Digerati Technologies	-36.31%	N/A	-29.16%

Insider and Institutional Ownership

86.9% of CarGurus shares are owned by institutional investors. 15.7% of CarGurus shares are owned by insiders. Comparatively, 25.6% of Digerati Technologies shares are owned by 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.

Valuation & Earnings

This table compares CarGurus and Digerati Technologies’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CarGurus	$914.24 million	2.76	$31.10 million	$0.18	130.39
Digerati Technologies	$31.62 million	0.13	-$8.29 million	($0.07)	-0.33

CarGurus has higher revenue and earnings than Digerati Technologies. Digerati Technologies 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 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, Digerati Technologies has a beta of -0.08, suggesting that its stock price is 108% less volatile than the S&P 500.

Summary

CarGurus beats Digerati Technologies on 12 of the 13 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 Digerati Technologies

Digerati Technologies, Inc., through its subsidiaries, provides a portfolio of Internet-based telephony products and services through its cloud application platform and session-based communication network in the United States. The company offers Internet broadband, fiber, mobile broadband, and cloud wide area network (WAN) or software-defined wide area network (SD-WAN) solutions; cloud communication services, including fully hosted IP/PBX, video conferencing, mobile applications, Voice over Internet Protocol (VoIP) transport, session initiation protocol (SIP) trunking, call center applications, auto attendant, voice and web conferencing, call recording, messaging, voicemail to email conversion, integrated mobility applications, and customized VoIP services; and remote network monitoring, data backup, and disaster recovery services, as well as enterprise-class data and connectivity solutions, such as cloud WAN or SD-WAN, fiber, mobile broadband, and Ethernet over copper services. It primarily serves small to medium-sized enterprise customers through distributors and value-added resellers. The company was formerly known as ATSI Communications Inc. and changed its name to Digerati Technologies, Inc. in March 2011. Digerati Technologies, Inc. was founded in 1993 and is headquartered in San Antonio, Texas.