Critical Contrast: Hour Loop (NASDAQ:HOUR) versus Cars.com (NYSE:CARS)

Cars.com (NYSE:CARS) and Hour Loop (NASDAQ:HOUR) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Valuation and Earnings

This table compares Cars.com and Hour Loop”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cars.com	$719.77 million	1.01	$48.19 million	$0.46	26.47
Hour Loop	$138.25 million	0.48	$660,000.00	$0.03	63.00

Cars.com has higher revenue and earnings than Hour Loop. Cars.com is trading at a lower price-to-earnings ratio than Hour Loop, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Cars.com has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Hour Loop has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Cars.com and Hour Loop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cars.com	0	3	4	0	2.57
Hour Loop	1	0	0	0	1.00

Cars.com presently has a consensus target price of $17.70, suggesting a potential upside of 45.34%. Given Cars.com’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Cars.com is more favorable than Hour Loop.

Profitability

This table compares Cars.com and Hour Loop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cars.com	4.16%	18.32%	8.30%
Hour Loop	0.59%	12.96%	3.57%

Institutional and Insider Ownership

89.2% of Cars.com shares are held by institutional investors. Comparatively, 0.3% of Hour Loop shares are held by institutional investors. 2.1% of Cars.com shares are held by insiders. Comparatively, 95.0% of Hour Loop shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Cars.com beats Hour Loop on 12 of the 14 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 Hour Loop

Hour Loop, Inc., an online retailer, engages in e-commerce retailing in the United States. The company sells products in various categories, including home/garden décor, toys, kitchenware, apparels, and electronics products. It sells its products through hourloop.com, as well as third-party marketplaces. Hour Loop, Inc. was founded in 2013 and is headquartered in Redmond, Washington.