CarGurus (NASDAQ:CARG – Get Rating) and Toast (NYSE:TOST – Get Rating) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.
Institutional & Insider Ownership
89.4% of CarGurus shares are owned by institutional investors. Comparatively, 50.8% of Toast shares are owned by institutional investors. 14.8% of CarGurus shares are owned by company insiders. Comparatively, 20.2% of Toast shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Risk & Volatility
CarGurus has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Toast has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CarGurus | 1 | 3 | 7 | 0 | 2.55 |
| Toast | 0 | 9 | 8 | 0 | 2.47 |
CarGurus currently has a consensus price target of $21.27, suggesting a potential upside of 11.84%. Toast has a consensus price target of $22.75, suggesting a potential upside of 9.32%. Given CarGurus’ stronger consensus rating and higher possible upside, analysts plainly believe CarGurus is more favorable than Toast.
Valuation & Earnings
This table compares CarGurus and Toast’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CarGurus | $1.66 billion | 1.32 | $193.79 million | $0.35 | 54.34 |
| Toast | $2.73 billion | 4.04 | -$275.00 million | ($0.65) | -32.02 |
CarGurus has higher earnings, but lower revenue than Toast. Toast is trading at a lower price-to-earnings ratio than CarGurus, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares CarGurus and Toast’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CarGurus | 18.68% | 17.88% | 11.12% |
| Toast | -11.01% | -29.74% | -18.84% |
Summary
CarGurus beats Toast on 9 of the 14 factors compared between the two stocks.
About CarGurus
Cargurus, Inc. is an online automotive platform, which engages in buying and selling vehicles that is building upon its listings marketplace with digital retail solutions and the CarOffer digital wholesale platform. It operates through the following segments: U.S. Marketplace, Digital Wholesale, and Other. The U.S. Marketplace segment offers marketplace services from customers. The Digital Wholesale segment consists of dealer-to-dealer and IMCO services and products which are sold on the CarOffer platform. The company was founded by Langley Steinert on November 10, 2005 and is headquartered in Cambridge, MA.
About Toast
Toast, Inc. operates a cloud-based and digital technology platform for the restaurant industry in the United States and Ireland. The company offers Toast Point of Sale (POS), a hardware product; Toast Order & Pay, which allows guests to order and pay from their mobile devices; Toast Flex that is used for on-counter order and pay, as well as used as a server station, guest kiosk, kitchen display system, or order fulfillment station; Toast Go, a handheld POS device that enhances the table turn times through tableside ordering and payment acceptance; and Toast Tap, a card reader. It also provides kitchen display system software that connects the front of the house with the kitchen staff; multi-location management software, which allows customers to manage and standardize their operations and configure menus; xtraCHEF that provides back-office tools; and Toast Flex for Kitchen, a larger format mountable piece of hardware that can be used as a kitchen screen. In addition, the company offers Toast Online Ordering & Toast TakeOut app, a software-based platform that provides restaurants to take off-premises orders directly through their branded website; First-Party Delivery services for restaurants to manage a fleet of drivers, and customize delivery hours, zones, fees, and minimum ticket sizes; Toast Delivery Services, which enables restaurants to utilize a partner network of delivery drivers; and Toast Delivery Partners services. Further, it provides loyalty programs and gift cards; payroll and team management products; business owner policy insurance and restaurant-specific add-ons; payment processing solutions; loans advanced to restaurants; purchase financing; reporting and analytics solutions; Toast Partner Connect that allows customers to discover, select, and connect their restaurant to its partners; and bi-directional APIs. The company was incorporated in 2011 and is headquartered in Boston, Massachusetts.
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