TrueCar (NASDAQ:TRUE – Get Rating) and PubMatic (NASDAQ:PUBM – Get Rating) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.
Valuation & Earnings
This table compares TrueCar and PubMatic's revenue, earnings per share (EPS) and valuation.
Get TrueCar alerts:| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TrueCar | $231.70 million | 0.62 | -$38.33 million | ($0.48) | -3.29 |
| PubMatic | $226.91 million | 3.74 | $56.60 million | $0.96 | 17.06 |
PubMatic has lower revenue, but higher earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than PubMatic, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
93.0% of TrueCar shares are owned by institutional investors. Comparatively, 42.9% of PubMatic shares are owned by institutional investors. 3.7% of TrueCar shares are owned by insiders. Comparatively, 1.2% of PubMatic shares are owned 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.Analyst Ratings
This is a breakdown of recent ratings and target prices for TrueCar and PubMatic, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TrueCar | 0 | 5 | 1 | 0 | 2.17 |
| PubMatic | 0 | 2 | 6 | 0 | 2.75 |
TrueCar currently has a consensus price target of $4.00, indicating a potential upside of 153.16%. PubMatic has a consensus price target of $32.75, indicating a potential upside of 99.94%. Given TrueCar's higher probable upside, analysts clearly believe TrueCar is more favorable than PubMatic.
Risk & Volatility
TrueCar has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, PubMatic has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.
Profitability
This table compares TrueCar and PubMatic's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TrueCar | -24.68% | -14.19% | -12.00% |
| PubMatic | 21.64% | 19.13% | 9.58% |
Summary
PubMatic beats TrueCar on 9 of the 14 factors compared between the two stocks.
About TrueCar
(Get Rating)
TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides accurate, geographically specific, and real-time pricing information for consumers and dealers; TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. TrueCar, Inc. was incorporated in 2005 and is headquartered in Santa Monica, California.
About PubMatic
(Get Rating)
PubMatic, Inc. provides a cloud infrastructure platform that enables real-time programmatic advertising transactions for Internet content creators and advertisers worldwide. The company's solutions include Openwrap, a header bidding solution that provides enterprise-grade management and analytics tools; Openwrap OTT, a header bidding management solution for OTT; Openwrap SDK, a header bidding solution for in-app developers; private marketplace solutions; and media buyer consoles. In addition, it offers Real-Time Bidding (RTB) programmatic technologies, which provides various selling options across screens and ad formats; digital advertising inventory quality solutions to detect and filter out invalid traffic and other nefarious activity; Ad quality solutions targeting the reduction of security issues, quality issues, and performance issues; Identity Hub, an identity solution that allows for the use of any advertiser preferred user identifier in a scaled and privacy-compliant fashion; Audience Encore, an audience data platform; and cross-platform video, a sell side platform, which connects trusted video buyers to premium publishers. The company's platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. PubMatic, Inc. was incorporated in 2006 and is based in Redwood City, California.
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