TrueCar (NASDAQ:TRUE) and Rakuten (OTCMKTS:RKUNY) Head-To-Head Survey

TrueCar (NASDAQ:TRUE) and Rakuten (OTCMKTS:RKUNY) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk 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 company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for TrueCar and Rakuten, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrueCar	2	5	0	0	1.71
Rakuten	1	0	0	2	3.00

TrueCar presently has a consensus price target of $2.65, indicating a potential upside of 4.33%. Given TrueCar’s higher probable upside, equities research analysts plainly believe TrueCar is more favorable than Rakuten.

Profitability

This table compares TrueCar and Rakuten’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%
Rakuten	-7.13%	-14.73%	-0.66%

Valuation and Earnings

This table compares TrueCar and Rakuten”s revenue, earnings per share (EPS) 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
Rakuten	$16.70 billion	0.61	-$1.19 billion	($0.54)	-8.76

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

Risk & Volatility

TrueCar has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500. Comparatively, Rakuten has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

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 Rakuten

Rakuten Group, Inc. provides services in e-commerce, fintech, digital content, and communications to various users in Japan and internationally. The company operates through three segments: Internet Services, FinTech, and Mobile. The Internet Services segment provides range of e-commerce sites, such as Rakuten Ichiba, an Internet shopping mall, online cash-back sites, travel booking sites, portal sites, and digital content sites. It also offers messaging services and sells advertising; and manages professional sport teams. The FinTech segment offers financial services over the internet related to banking and securities, credit cards, life insurance, general insurance, electronic payment business, crypto asset (virtual currency) spot transaction, etc. The Mobile segment provides communication services and technology, electricity supply, and digital content site services. The company was formerly known as Rakuten, Inc. and changed its name to Rakuten Group, Inc. in April 2021. Rakuten Group, Inc. was incorporated in 1997 and is headquartered in Setagaya, Japan.