CarGurus (NASDAQ:CARG) & LKQ (NASDAQ:LKQ) Head-To-Head Review

LKQ (NASDAQ:LKQ) and CarGurus (NASDAQ:CARG) are both mid-cap auto/tires/trucks companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LKQ	5.04%	13.85%	5.60%
CarGurus	4.28%	32.54%	20.08%

Volatility and Risk

LKQ has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, CarGurus has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for LKQ and CarGurus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LKQ	0	0	5	0	3.00
CarGurus	0	7	6	0	2.46

LKQ currently has a consensus target price of $51.40, indicating a potential upside of 70.65%. CarGurus has a consensus target price of $37.63, indicating a potential upside of 14.05%. Given LKQ’s stronger consensus rating and higher possible upside, analysts plainly believe LKQ is more favorable than CarGurus.

Institutional & Insider Ownership

95.6% of LKQ shares are owned by institutional investors. Comparatively, 86.9% of CarGurus shares are owned by institutional investors. 0.6% of LKQ shares are owned by company insiders. Comparatively, 17.0% of CarGurus shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares LKQ and CarGurus”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LKQ	$14.36 billion	0.54	$690.00 million	$2.73	11.03
CarGurus	$894.38 million	3.85	$20.97 million	$0.35	94.26

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

About LKQ

LKQ Corporation engages in the distribution of replacement parts, components, and systems used in the repair and maintenance of vehicles and specialty vehicle aftermarket products and accessories. It operates through four segments: Wholesale-North America, Europe, Specialty, and Self Service. The company distributes bumper covers, automotive body panels, and lights, as well as mechanical automotive parts and accessories; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; lights and bumper assemblies; scrap metal and other materials to metals recyclers; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries. In addition, the company distributes recreational vehicle appliances and air conditioners, towing hitches, truck bed covers, vehicle protection products, marine electronics, cargo management products, wheels, tires, and suspension products. It serves collision and mechanical repair shops, and new and used car dealerships, as well as retail customers. The company operates in the United States, Canada, the United Kingdom, Germany, Belgium, the Netherlands, Luxembourg, Italy, the Czech Republic, Austria, Poland, Slovakia, Taiwan, and other European countries. LKQ Corporation was incorporated in 1998 and is headquartered in Chicago, Illinois.

About CarGurus

CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale. The company provides an online automotive marketplace where customers can search for new and used car listings from its dealers and sell their car to dealers and other consumers; and paid listings subscriptions for enhanced access to its marketplace that connects dealers to a large audience of informed and engaged consumers. It also offers dealer and non-dealer advertising products for its websites and social media platforms. The company operates online marketplaces under the CarGurus brand in the United States, Canada, and the United Kingdom; Autolist and CarOffer brands in the United States; and PistonHeads brand in the United Kingdom. The company was formerly known as CarGurus LLC and changed its name to CarGurus, Inc. in June 2015. CarGurus, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.