Analyzing United Internet (OTCMKTS:UDIRF) & TrueCar (NASDAQ:TRUE)

TrueCar (NASDAQ:TRUE) and United Internet (OTCMKTS:UDIRF) are both communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

79.4% of TrueCar shares are owned by institutional investors. 3.9% of TrueCar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

TrueCar has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500. Comparatively, United Internet has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TrueCar and United Internet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrueCar	1	4	0	0	1.80
United Internet	0	0	2	0	3.00

TrueCar currently has a consensus price target of $2.55, suggesting a potential upside of 0.39%. Given TrueCar’s higher possible upside, research analysts clearly believe TrueCar is more favorable than United Internet.

Valuation & Earnings

This table compares TrueCar and United Internet”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrueCar	$181.22 million	1.25	-$31.05 million	($0.22)	-11.55
United Internet	$6.85 billion	0.77	$114.57 million	($0.34)	-80.40

United Internet has higher revenue and earnings than TrueCar. United Internet is trading at a lower price-to-earnings ratio than TrueCar, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TrueCar and United Internet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TrueCar	-10.27%	-23.76%	-18.02%
United Internet	N/A	N/A	N/A

About TrueCar

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 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. The company was incorporated in 2005 and is headquartered in Santa Monica, California.

About United Internet

United Internet AG, through its subsidiaries, operates as an Internet service provider worldwide. The company operates through Consumer Access, Business Access, Consumer Applications, and Business Applications segments. It offers landline-based broadband and mobile internet products, including home networks, online storage, telephony, and IPTV for private users; and telecommunication products ranging from fiber-optic direct connections to tailored ICT solutions, which include voice, data, and network solutions, as well as infrastructure services to national and international carriers and ISPs. The company also provides applications and services for home users, such as personal information management applications comprising email, to-do lists, appointments, and addresses; and online cloud storage, as well as domains and website solutions. In addition, it provides business applications for freelancers and small to medium enterprises, such as domains, websites, web hosting, servers, cloud solutions, e-shops, group work, online cloud storage, and office software. It offers its access products through the yourfone, smartmobile.de, 1&1, and 1&1 Versatel brands; and applications through GMX, mail.com, WEB.DE, home.pl, Arsys, STRATO, IONOS, Fasthosts, we22, InterNetX, united-domains, and World4You brand names. In addition, the company offers customers professional services in the fields of active domain management; performance-based advertising and sales services under the Sedo brand name; online advertising services under the United Internet Media brand name; and white-label website builder services under the we22 brand, as well as sells IT hardware. The company was incorporated in 1988 and is headquartered in Montabaur, Germany.