CarGurus (NASDAQ:CARG) and Applied Digital (NASDAQ:APLD) Financial Review

Applied Digital (NASDAQ:APLDGet Free Report) and CarGurus (NASDAQ:CARGGet Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Applied Digital -28.94% -31.26% -10.20%
CarGurus 21.89% 15.20% 10.64%

Valuation & Earnings

This table compares Applied Digital and CarGurus’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Digital $114.66 million 5.05 -$44.65 million ($0.35) -13.54
CarGurus $977.86 million 2.67 $193.79 million $0.59 39.42

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

Volatility & Risk

Applied Digital has a beta of 4.25, suggesting that its stock price is 325% more volatile than the S&P 500. Comparatively, CarGurus has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Insider & Institutional Ownership

53.8% of Applied Digital shares are owned by institutional investors. Comparatively, 86.9% of CarGurus shares are owned by institutional investors. 23.7% of Applied Digital shares are owned by company insiders. Comparatively, 15.7% of CarGurus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Applied Digital and CarGurus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Digital 0 0 4 0 3.00
CarGurus 1 3 7 0 2.55

Applied Digital presently has a consensus price target of $14.50, indicating a potential upside of 205.91%. CarGurus has a consensus price target of $23.50, indicating a potential upside of 1.03%. Given Applied Digital’s stronger consensus rating and higher possible upside, analysts plainly believe Applied Digital is more favorable than CarGurus.

Summary

CarGurus beats Applied Digital on 9 of the 14 factors compared between the two stocks.

About Applied Digital

(Get Free Report)

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.

About CarGurus

(Get Free Report)

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale The company provides consumers an online automotive marketplace where they can search for new and used car listings from its dealers, as well as sell their car to dealers and other consumers. Its marketplace connects dealers to a large audience of informed and engaged consumers. The company operates online marketplaces under the CarGurus brand in Canada and the United Kingdom; Autolist and CarOffer brands in the United States; and PistonHeads brand in the United Kingdom. CarGurus, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.

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