Analyzing Cars.com (NYSE:CARS) & Phunware (NASDAQ:PHUN)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cars.com	3.51%	6.70%	2.88%
Phunware	N/A	-438.21%	-127.45%

Institutional & Insider Ownership

89.2% of Cars.com shares are held by institutional investors. Comparatively, 7.6% of Phunware shares are held by institutional investors. 2.1% of Cars.com shares are held by insiders. Comparatively, 1.2% of Phunware 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.

Risk and Volatility

Cars.com has a beta of 2.11, meaning that its share price is 111% more volatile than the S&P 500. Comparatively, Phunware has a beta of 2.54, meaning that its share price is 154% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cars.com and Phunware, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cars.com	0	2	2	0	2.50
Phunware	0	0	3	0	3.00

Cars.com currently has a consensus price target of $22.25, suggesting a potential upside of 39.06%. Phunware has a consensus price target of $16.33, suggesting a potential upside of 131.02%. Given Phunware’s stronger consensus rating and higher probable upside, analysts clearly believe Phunware is more favorable than Cars.com.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cars.com	$713.01 million	1.48	$118.44 million	$1.57	10.19
Phunware	$4.12 million	19.44	-$52.78 million	N/A	N/A

Cars.com has higher revenue and earnings than Phunware.

Summary

Cars.com beats Phunware on 7 of the 12 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 Phunware

Phunware, Inc., together with its subsidiaries, provides integrated software platform that equips companies with the products, solutions, and services to engage, manage, and monetize their mobile application portfolios in the United States and internationally. The company's products and services include mobile software and application transaction solutions comprise integration of software development kit (SDK) licenses, which consists of analytics that offers data related to application use and engagement; content management that allows application administrators to create and manage app content in a cloud-based portal; alerts, notifications, and messaging, which enables brands to send messages; marketing automation that enables location-triggered messages and workflow; advertising; and location-based services, such as mapping, navigation, wayfinding, workflow, asset management, and policy enforcement. It is also involved in the integration of its SDK licenses into existing applications maintained by its customers, as well as custom application development and support services; and provision of cloud-based vertical solutions for healthcare, retail, sports, aviation, real estate, hospitality, education, and other applications, as well as application transactions, including re-occurring and one-time transactional media purchases for application discovery, user acquisition and audience building, audience engagement, and audience monetization. Phunware, Inc. was founded in 2009 and is headquartered in Austin, Texas.