Reviewing Chewy (NYSE:CHWY) and Cars.com (NYSE:CARS)

Chewy (NYSE:CHWY) and Cars.com (NYSE:CARS) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Chewy and Cars.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chewy	0	5	18	1	2.83
Cars.com	1	3	3	1	2.50

Chewy presently has a consensus price target of $41.24, suggesting a potential upside of 104.58%. Cars.com has a consensus price target of $14.67, suggesting a potential upside of 57.45%. Given Chewy’s stronger consensus rating and higher probable upside, research analysts plainly believe Chewy is more favorable than Cars.com.

Profitability

This table compares Chewy and Cars.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chewy	1.77%	53.48%	7.22%
Cars.com	3.73%	18.12%	8.07%

Institutional & Insider Ownership

93.1% of Chewy shares are held by institutional investors. Comparatively, 89.2% of Cars.com shares are held by institutional investors. 0.3% of Chewy shares are held by company insiders. Comparatively, 3.4% of Cars.com shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Chewy and Cars.com”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chewy	$12.60 billion	0.67	$222.80 million	$0.52	38.76
Cars.com	$723.24 million	0.72	$20.05 million	$0.43	21.66

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

Volatility and Risk

Chewy has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Cars.com has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Summary

Chewy beats Cars.com on 9 of the 14 factors compared between the two stocks.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.

About Cars.com

Cars.com Inc., through its subsidiaries, operates as a digital automotive marketplace that connects local car dealers to consumers in the United States. The company offers a suite of digital solutions that creates connections between individuals researching cars or looking to purchase a car with car dealerships and automotive original equipment manufacturers. It also sells online subscription advertising products to car dealerships by its direct sales force, as well as through its affiliate sales channel. In addition, the company sells display advertising to national advertisers. Further, it offers online automotive marketplace service that connects buyers and sellers through Cars.com, Auto.com, DealerRater.com, NewCars.com, PickupTrucks.com, DealerInspire.com, and LaunchDigitalMarketing.com Websites. Its platform hosts approximately 4.9 million new and used vehicle listings and serves approximately 20,000 franchise and independent car dealers. Cars.com Inc. was founded in 1998 and is headquartered in Chicago, Illinois.