Castlight Health (NYSE:CSLT) and Cars.com (NYSE:CARS) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.
Insider & Institutional Ownership
46.2% of Castlight Health shares are held by institutional investors. Comparatively, 95.6% of Cars.com shares are held by institutional investors. 17.1% of Castlight Health shares are held by company insiders. Comparatively, 0.5% of Cars.com shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Castlight Health has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500. Comparatively, Cars.com has a beta of 2.41, meaning that its share price is 141% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Castlight Health and Cars.com, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Castlight Health | 1 | 1 | 0 | 0 | 1.50 |
| Cars.com | 0 | 1 | 6 | 0 | 2.86 |
Castlight Health currently has a consensus price target of $1.3750, suggesting a potential downside of 21.88%. Cars.com has a consensus price target of $14.00, suggesting a potential upside of 4.32%. Given Cars.com's stronger consensus rating and higher probable upside, analysts plainly believe Cars.com is more favorable than Castlight Health.
Earnings & Valuation
This table compares Castlight Health and Cars.com's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Castlight Health | $143.31 million | 1.94 | $-40,000,000.00 | ($0.25) | -7.04 |
| Cars.com | $606.68 million | 1.51 | $-445,320,000.00 | $1.45 | 9.21 |
Castlight Health has higher earnings, but lower revenue than Cars.com. Castlight Health is trading at a lower price-to-earnings ratio than Cars.com, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Castlight Health and Cars.com's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Castlight Health | -49.79% | -12.18% | -8.52% |
| Cars.com | -151.54% | 17.78% | 7.01% |
Summary
Cars.com beats Castlight Health on 10 of the 14 factors compared between the two stocks.
