Head-To-Head Analysis: CarGurus (NASDAQ:CARG) vs. Digerati Technologies (OTCMKTS:DTGI)

Digerati Technologies (OTCMKTS:DTGI) and CarGurus (NASDAQ:CARG) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Volatility & Risk

Digerati Technologies has a beta of -0.08, indicating that its stock price is 108% less volatile than the S&P 500. Comparatively, CarGurus has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500.

Valuation and Earnings

This table compares Digerati Technologies and CarGurus’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digerati Technologies	$31.62 million	0.13	-$8.29 million	($0.07)	-0.34
CarGurus	$914.24 million	2.61	$31.10 million	$0.18	123.33

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

Analyst Ratings

This is a summary of recent recommendations for Digerati Technologies and CarGurus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digerati Technologies	0	0	0	0	N/A
CarGurus	0	4	5	0	2.56

CarGurus has a consensus price target of $24.90, indicating a potential upside of 12.16%. Given CarGurus’ higher possible upside, analysts clearly believe CarGurus is more favorable than Digerati Technologies.

Institutional and Insider Ownership

86.9% of CarGurus shares are owned by institutional investors. 25.6% of Digerati Technologies shares are owned by insiders. Comparatively, 15.7% of CarGurus shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Digerati Technologies	-36.31%	N/A	-29.16%
CarGurus	3.40%	7.74%	5.21%

Summary

CarGurus beats Digerati Technologies on 12 of the 13 factors compared between the two stocks.

About Digerati Technologies

Digerati Technologies, Inc., through its subsidiaries, provides a portfolio of Internet-based telephony products and services through its cloud application platform and session-based communication network in the United States. The company offers Internet broadband, fiber, mobile broadband, and cloud wide area network (WAN) or software-defined wide area network (SD-WAN) solutions; cloud communication services, including fully hosted IP/PBX, video conferencing, mobile applications, Voice over Internet Protocol (VoIP) transport, session initiation protocol (SIP) trunking, call center applications, auto attendant, voice and web conferencing, call recording, messaging, voicemail to email conversion, integrated mobility applications, and customized VoIP services; and remote network monitoring, data backup, and disaster recovery services, as well as enterprise-class data and connectivity solutions, such as cloud WAN or SD-WAN, fiber, mobile broadband, and Ethernet over copper services. It primarily serves small to medium-sized enterprise customers through distributors and value-added resellers. The company was formerly known as ATSI Communications Inc. and changed its name to Digerati Technologies, Inc. in March 2011. Digerati Technologies, Inc. was founded in 1993 and is headquartered in San Antonio, Texas.

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.