Comparing Vimeo (NASDAQ:VMEO) & TrueCar (NASDAQ:TRUE)

TrueCar (NASDAQ:TRUE) and Vimeo (NASDAQ:VMEO) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for TrueCar and Vimeo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrueCar	0	1	1	0	2.50
Vimeo	0	2	0	0	2.00

TrueCar currently has a consensus target price of $4.00, suggesting a potential upside of 9.29%. Vimeo has a consensus target price of $4.25, suggesting a potential upside of 5.72%. Given TrueCar’s stronger consensus rating and higher probable upside, research analysts plainly believe TrueCar is more favorable than Vimeo.

Insider & Institutional Ownership

79.4% of TrueCar shares are owned by institutional investors. Comparatively, 85.0% of Vimeo shares are owned by institutional investors. 3.3% of TrueCar shares are owned by insiders. Comparatively, 6.3% of Vimeo shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

TrueCar has a beta of 1.88, suggesting that its share price is 88% more volatile than the S&P 500. Comparatively, Vimeo has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TrueCar	-22.15%	-17.26%	-13.38%
Vimeo	6.88%	7.71%	4.69%

Earnings and Valuation

This table compares TrueCar and Vimeo’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrueCar	$158.71 million	2.11	-$49.77 million	($0.40)	-9.15
Vimeo	$418.54 million	1.63	$22.03 million	$0.17	23.65

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

Summary

Vimeo beats TrueCar on 10 of the 14 factors compared between the two stocks.

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 Vimeo

Vimeo, Inc., together with its subsidiaries, provides video software solutions worldwide. It provides the video tools through a software-as-a-service model, which enables its users to create, collaborate, and communicate with video on a single platform. The company also offers over-the-top OTT streaming and monetization services; AI-driven video creation and editing tools; and interactive and shoppable video tools. It serves large organizations, small businesses, creative professionals, marketers, and digital agencies. The company was founded in 2004 and is headquartered in New York, New York.