East Stone Acquisition (NASDAQ:ESSC) and TrueCar (NASDAQ:TRUE) are both small-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.
Profitability
This table compares East Stone Acquisition and TrueCar's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| East Stone Acquisition | N/A | N/A | N/A |
| TrueCar | -6.11% | -0.67% | -0.54% |
Valuation and Earnings
This table compares East Stone Acquisition and TrueCar's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| East Stone Acquisition | N/A | N/A | N/A | N/A | N/A |
| TrueCar | $353.88 million | 1.35 | $-54,890,000.00 | ($0.39) | -12.44 |
East Stone Acquisition has higher earnings, but lower revenue than TrueCar.
Analyst Ratings
This is a breakdown of recent recommendations for East Stone Acquisition and TrueCar, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| East Stone Acquisition | 0 | 0 | 0 | 0 | N/A |
| TrueCar | 0 | 4 | 5 | 0 | 2.56 |
TrueCar has a consensus target price of $5.8250, indicating a potential upside of 20.10%. Given TrueCar's higher possible upside, analysts plainly believe TrueCar is more favorable than East Stone Acquisition.
Insider and Institutional Ownership
50.0% of East Stone Acquisition shares are held by institutional investors. Comparatively, 89.5% of TrueCar shares are held by institutional investors. 4.2% of TrueCar shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
TrueCar beats East Stone Acquisition on 5 of the 8 factors compared between the two stocks.
