Porch Group (NASDAQ:PRCH) versus Cango (NYSE:CANG) Critical Survey

Cango (NYSE:CANG) and Porch Group (NASDAQ:PRCH) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Cango and Porch Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cango	0	0	0	0	0.00
Porch Group	0	1	5	1	3.00

Porch Group has a consensus price target of $4.18, suggesting a potential upside of 21.12%. Given Porch Group’s stronger consensus rating and higher probable upside, analysts plainly believe Porch Group is more favorable than Cango.

Profitability

This table compares Cango and Porch Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cango	51.90%	3.55%	3.02%
Porch Group	-14.55%	N/A	-10.57%

Volatility & Risk

Cango has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Porch Group has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.

Institutional & Insider Ownership

4.2% of Cango shares are owned by institutional investors. Comparatively, 48.5% of Porch Group shares are owned by institutional investors. 29.1% of Cango shares are owned by insiders. Comparatively, 23.5% of Porch Group shares are owned 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.

Earnings & Valuation

This table compares Cango and Porch Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cango	$239.71 million	1.73	-$5.33 million	$0.17	22.41
Porch Group	$452.10 million	0.91	-$133.93 million	($0.70)	-4.93

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

Summary

Cango beats Porch Group on 8 of the 15 factors compared between the two stocks.

About Cango

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.

About Porch Group

Porch Group, Inc., together with its subsidiaries, operates a vertical software and insurance platform in the United States. The company operates in two segments, Vertical Software and Insurance. The Vertical Software segment provides software and services to inspection, mortgage, and title companies on a subscription and transactional basis, as well as move and post-move services. This segment offers inspection software and services, title insurance software, mortgage software, moving services, mover and homeowner marketing, and measurement software for roofers. The Insurance segment offers consumers with insurance and warranty products to protect their homes. This segment provides property-related insurance and captive reinsurance products; and warranty products under the Porch Warranty, American Home Protect, and Residential Warranty Services brands. The company was founded in 2011 and is headquartered in Seattle, Washington.