Fox Factory (NASDAQ:FOXF – Get Free Report) and Vroom (NASDAQ:VRM – Get Free Report) are both small-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.
Insider & Institutional Ownership
25.8% of Vroom shares are owned by institutional investors. 0.9% of Fox Factory shares are owned by insiders. Comparatively, 2.9% of Vroom shares are owned 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.
Risk & Volatility
Fox Factory has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Vroom has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fox Factory | 2 | 3 | 2 | 1 | 2.25 |
| Vroom | 1 | 0 | 0 | 0 | 1.00 |
Fox Factory presently has a consensus price target of $23.20, indicating a potential upside of 36.15%. Given Fox Factory’s stronger consensus rating and higher probable upside, analysts plainly believe Fox Factory is more favorable than Vroom.
Profitability
This table compares Fox Factory and Vroom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fox Factory | -20.25% | 5.20% | 2.32% |
| Vroom | -37.16% | -51.07% | -6.63% |
Valuation & Earnings
This table compares Fox Factory and Vroom”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Fox Factory | $1.47 billion | 0.49 | -$544.58 million | ($7.17) | -2.38 |
| Vroom | $178.83 million | 0.24 | -$7.96 million | ($12.76) | -0.63 |
Vroom has lower revenue, but higher earnings than Fox Factory. Fox Factory is trading at a lower price-to-earnings ratio than Vroom, indicating that it is currently the more affordable of the two stocks.
Summary
Fox Factory beats Vroom on 11 of the 15 factors compared between the two stocks.
About Fox Factory
Fox Factory Holding Corp. designs, engineers, manufactures, and markets performance-defining products and system worldwide. The company offers powered vehicle products for side-by-side vehicles, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles, snowmobiles, and specialty vehicles and applications, such as military, motorcycles, and commercial trucks; lift kits and components with shock products and aftermarket accessory packages for trucks; and mid-end and high-end front fork and rear suspension products. It also provides suspension tuning services, as well as wheels, off-road tires and accessories. In addition, the company offers mountain and gravel bike wheels, and other performance cycling components, including cranks, chainrings, pedals, bars, stems, and seat posts, as well as baseball and softball products comprising metal bats, wood bats, apparel and accessories, batting gloves, fielding gloves, and bags and protective equipment under the Marucci brand. The company serves aftermarket applications products under the BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4×4 Posi-Lok, Ridetech, Tuscany, Outside Van, SCA, and Custom Wheel House brands; and mountain bikes, e-bikes, and gravel bikes under the FOX, Race Face, Easton Cycling, and Marzocchi brands. Fox Factory Holding Corp. was incorporated in 2007 and is based in Duluth, Georgia.
About Vroom
Vroom, Inc. operates as an automotive finance company. The company offers vehicle financing to its customers through third party dealers under the UACC brand. It also provides artificial intelligence powered analytics and digital services to dealers, automotive financial services companies, and others in the automotive industry for automotive retail. The company was formerly known as Auto America, Inc. and changed its name to Vroom, Inc. in July 2015. Vroom, Inc. was incorporated in 2012 and is based in Houston, Texas.
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