Comparing Cars.com (NYSE:CARS) & Yalla Group (NYSE:YALA)

Cars.com (NYSE:CARS) and Yalla Group (NYSE:YALA) are both small-cap communication services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Analyst Recommendations

This is a summary of current ratings for Cars.com and Yalla Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cars.com	0	5	3	0	2.38
Yalla Group	0	1	0	0	2.00

Cars.com presently has a consensus target price of $14.58, suggesting a potential upside of 53.11%. Given Cars.com’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Cars.com is more favorable than Yalla Group.

Volatility & Risk

Cars.com has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Yalla Group has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cars.com	4.73%	18.82%	8.31%
Yalla Group	40.78%	16.82%	15.14%

Insider and Institutional Ownership

89.2% of Cars.com shares are held by institutional investors. Comparatively, 4.7% of Yalla Group shares are held by institutional investors. 3.4% of Cars.com shares are held by insiders. Comparatively, 52.2% of Yalla Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cars.com	$725.63 million	0.70	$20.05 million	$0.57	16.71
Yalla Group	$335.11 million	2.56	$149.84 million	$0.77	7.29

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

Summary

Cars.com beats Yalla Group on 8 of the 14 factors compared between the two stocks.

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.

About Yalla Group

Yalla Group Limited operates a social networking and gaming platform primarily in the Middle East and North Africa region. It provides mobile applications, including Yalla, a voice-centric group chat platform; and Yalla Ludo, a casual gaming application. The company’s platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.