Analyzing QuoteMedia (OTCMKTS:QMCI) & TrueCar (NASDAQ:TRUE)

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

Volatility and Risk

TrueCar has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500. Comparatively, QuoteMedia has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TrueCar	-15.95%	-24.73%	-18.73%
QuoteMedia	-12.55%	N/A	-33.71%

Analyst Ratings

This is a summary of current ratings and target prices for TrueCar and QuoteMedia, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrueCar	2	2	2	0	2.00
QuoteMedia	0	0	0	0	0.00

TrueCar presently has a consensus target price of $3.19, suggesting a potential upside of 48.26%. Given TrueCar’s stronger consensus rating and higher probable upside, equities research analysts plainly believe TrueCar is more favorable than QuoteMedia.

Valuation & Earnings

This table compares TrueCar and QuoteMedia”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrueCar	$175.60 million	1.08	-$31.05 million	($0.34)	-6.32
QuoteMedia	$18.74 million	0.75	-$1.33 million	($0.03)	-5.21

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

Insider & Institutional Ownership

79.4% of TrueCar shares are held by institutional investors. 3.9% of TrueCar shares are held by insiders. Comparatively, 47.1% of QuoteMedia shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

TrueCar beats QuoteMedia on 8 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 QuoteMedia

QuoteMedia, Inc. provides financial data, market research information, analytics, news feeds, and financial software solutions to online brokerages, banks, clearing firms, financial service companies, media portals, and public corporations worldwide. It collects, aggregates, and delivers delayed and real-time financial data content through the Internet. The company also offers market information and services, including streaming stock market data feeds, research and analysis information, content applications, portfolio management systems, software products, corporate investor relations provisioning, news services, mobile apps, and custom development. In addition, its data feeds coverage includes equities, options, futures, commodities, currencies, mutual funds, ETFs, and indices. Further, the company provides financial data delivery application products and components comprising quote modules, charts, market movers, news, watch lists, tickers, market summaries, option chains, filings, fundamentals, investor relations solutions, stock and fund screeners, and others; and QMod, a web delivery system for delivering market data content to Web platforms. Additionally, it offers portfolio managements systems, including Quotestream Desktop, We, and Mobile, a Web-delivered, embedded application providing real-time, tick-by-tick, streaming market quotes and research information; Quotestream Professional that offers low-latency tick-by-tick data, customizable screens, advanced charting, comprehensive technical analysis, news, and research data for financial services professionals; Web Portfolio Manager, which provides immediate web access to detailed quote data, market and company news, charting, depth/level II, filings, historical data, snap quotes, and others; and Quotestream Connect that delivers real time data feeds to individual users to power third party applications. The company was incorporated in 1992 and is headquartered in Fountain Hills, Arizona.