Critical Survey: Net Element (NETE) versus CarGurus (CARG)

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Net Element (NASDAQ: CARG) and CarGurus (NASDAQ:CARG) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Valuation and Earnings

This table compares Net Element and CarGurus’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Net Element $60.06 million 0.39 -$9.91 million ($5.04) -1.20
CarGurus $316.86 million 16.69 $13.19 million $0.12 402.50

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

Profitability

This table compares Net Element and CarGurus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Net Element -13.22% -88.17% -30.52%
CarGurus 10.34% 12.60% 6.57%

Institutional & Insider Ownership

3.2% of Net Element shares are owned by institutional investors. Comparatively, 63.3% of CarGurus shares are owned by institutional investors. 27.9% of Net Element shares are owned by company insiders. Comparatively, 51.0% of CarGurus shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Net Element and CarGurus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Net Element 0 0 0 0 N/A
CarGurus 0 2 5 0 2.71

CarGurus has a consensus price target of $43.20, suggesting a potential downside of 10.56%. Given CarGurus’ higher probable upside, analysts clearly believe CarGurus is more favorable than Net Element.

Summary

CarGurus beats Net Element on 11 of the 11 factors compared between the two stocks.

Net Element Company Profile

Net Element, Inc. operates as a financial technology and value-added solutions company. It operates in two segments, North American Transaction Solutions, and International Transaction Solutions. The company offers a range of payment acceptance and processing services that enable merchants of various sizes to accept and process approximately 100 payment options, including credit, debit, prepaid, and alternative payments; and value-added services and technologies, such as integrated payment technologies, point-of-sale solutions (POS), security solutions, fraud management, information solutions, and analytical tools. Its services include Unified Payments, a payment acceptance solution; Unified m-POS, an easy-to-use mobile application for small and medium sized businesses (SMB); Aptito, a cloud-based POS platform for the hospitality industry and SMB merchants; Restoactive, a visual POS integration solution for restaurants; Zero Pay, a payment acceptance program for SMB merchants; PayOnline, an integrated e-commerce and mobile payments processing platform, and fraud management system; Pay?Travel, a payment processing solutions to the travel industry; Sales Central, a cloud-based solution to enhance responsiveness of indirect non-bank sales forces and sales efficiency; Netevia, which delivers end-to-end payment processing through easy-to-use APIs; and Digital Provider, an integrated direct-carrier and mobile operator solution for smaller content providers and merchants throughout selected international markets. It operates in North America, Russia, Europe, Asia, and the Commonwealth of Independent States. The company was formerly known as Net Element International, Inc. and changed its name to Net Element, Inc. in December 2013. Net Element, Inc. was founded in 2004 and is based in North Miami Beach, Florida.

CarGurus Company Profile

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars worldwide. The company's marketplace enables users with third-party validation on pricing, dealer reputation, and other information. As of June 30, 2017, it had an active dealer network of approximately 40,000 dealers; and approximately 5.4 million car listings. The company was founded in 2005 and is headquartered in Cambridge, Massachusetts..

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