TrueCar (NASDAQ:TRUE) and Sohu.com (NASDAQ:SOHU) Head to Head Contrast

Sohu.com (NASDAQ:SOHU) and TrueCar (NASDAQ:TRUE) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Institutional and Insider Ownership

33.0% of Sohu.com shares are owned by institutional investors. Comparatively, 79.4% of TrueCar shares are owned by institutional investors. 21.1% of Sohu.com shares are owned by company insiders. Comparatively, 3.9% of TrueCar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Sohu.com has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500. Comparatively, TrueCar has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500.

Profitability

This table compares Sohu.com and TrueCar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sohu.com	25.92%	-4.20%	-2.55%
TrueCar	-10.27%	-23.76%	-18.02%

Valuation & Earnings

This table compares Sohu.com and TrueCar”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sohu.com	$598.40 million	0.84	-$100.27 million	$5.01	3.36
TrueCar	$181.22 million	1.25	-$31.05 million	($0.22)	-11.57

TrueCar has lower revenue, but higher earnings than Sohu.com. TrueCar is trading at a lower price-to-earnings ratio than Sohu.com, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Sohu.com and TrueCar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sohu.com	0	1	2	0	2.67
TrueCar	2	5	0	0	1.71

Sohu.com currently has a consensus target price of $20.00, indicating a potential upside of 18.98%. TrueCar has a consensus target price of $2.65, indicating a potential upside of 4.13%. Given Sohu.com’s stronger consensus rating and higher probable upside, analysts plainly believe Sohu.com is more favorable than TrueCar.

Summary

Sohu.com beats TrueCar on 10 of the 14 factors compared between the two stocks.

About Sohu.com

Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.

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.