WebMD Health Corp. (NASDAQ: WBMD) and TrueCar (NASDAQ:TRUE) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.
Volatility and Risk
WebMD Health Corp. has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, TrueCar has a beta of 2.95, meaning that its stock price is 195% more volatile than the S&P 500.
Earnings & Valuation
This table compares WebMD Health Corp. and TrueCar’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WebMD Health Corp.||$708.99 million||3.42||$184.52 million||$1.93||34.45|
|TrueCar||$306.80 million||5.19||-$16.51 million||($0.35)||-46.23|
WebMD Health Corp. has higher revenue and earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than WebMD Health Corp., indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for WebMD Health Corp. and TrueCar, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WebMD Health Corp.||0||6||2||0||2.25|
WebMD Health Corp. currently has a consensus price target of $64.00, suggesting a potential downside of 3.73%. TrueCar has a consensus price target of $18.33, suggesting a potential upside of 13.31%. Given TrueCar’s stronger consensus rating and higher probable upside, analysts clearly believe TrueCar is more favorable than WebMD Health Corp..
This table compares WebMD Health Corp. and TrueCar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WebMD Health Corp.||10.74%||15.50%||4.32%|
Insider & Institutional Ownership
91.0% of WebMD Health Corp. shares are held by institutional investors. Comparatively, 92.0% of TrueCar shares are held by institutional investors. 5.6% of WebMD Health Corp. shares are held by insiders. Comparatively, 15.5% of TrueCar shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
TrueCar beats WebMD Health Corp. on 7 of the 13 factors compared between the two stocks.
About WebMD Health Corp.
WebMD Health Corp. is a provider of health information services. The Company provides its services to consumers, physicians and other healthcare professionals through its Websites, mobile applications and health-focused publications. Advertisers and sponsors use The WebMD Health Network to reach and engage healthcare professionals and consumers who are interested in healthy living, wellness, diseases and conditions, and other health-related topics. It also markets services under the WebMD Health Services brand that help employers and health plans improve the health and wellness of their employee and plan participant populations. The WebMD Health Network includes www.WebMD.com, its primary Website for consumers and related mobile applications; www.Medscape.com, its primary Website for physicians and other healthcare professionals and related mobile applications; and other Websites through which it provides its branded health and wellness content, tools and services.
TrueCar, Inc. is an Internet-based information, technology, and communication services company. The Company has a data-driven online platform, which features market data and analytics. The Company-branded platform is available on its TrueCar Website and mobile applications. It customizes and operates its platform on a co-branded basis for its affinity group marketing partners, including financial institutions, membership-based organizations, and employee buying programs for a range of enterprises. The Company enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar Certified Dealers. Its network of over 13,000 TrueCar Certified Dealers consists primarily of new car franchises, as well as independent dealers selling used vehicles. Its subsidiary, ALG, Inc., provides forecasts and consulting services regarding determination of the residual value of an automobile at given future points in time.
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