Financial Review: Carvana (CVNA) versus Its Competitors

Carvana (NYSE: CVNA) is one of 20 publicly-traded companies in the “Automotive dealers & gasoline service stations” industry, but how does it contrast to its peers? We will compare Carvana to similar businesses based on the strength of its dividends, earnings, valuation, profitability, analyst recommendations, risk and institutional ownership.

Institutional & Insider Ownership

14.9% of Carvana shares are owned by institutional investors. Comparatively, 62.1% of shares of all “Automotive dealers & gasoline service stations” companies are owned by institutional investors. 21.7% of Carvana shares are owned by company insiders. Comparatively, 16.5% of shares of all “Automotive dealers & gasoline service stations” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Carvana and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carvana 1 5 8 0 2.50
Carvana Competitors 115 622 667 29 2.43

Carvana presently has a consensus target price of $20.81, indicating a potential downside of 29.15%. As a group, “Automotive dealers & gasoline service stations” companies have a potential upside of 18.65%. Given Carvana’s peers higher probable upside, analysts plainly believe Carvana has less favorable growth aspects than its peers.

Profitability

This table compares Carvana and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carvana -11.17% -74.69% -19.48%
Carvana Competitors 3.22% 33.52% 3.60%

Valuation & Earnings

This table compares Carvana and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Carvana $858.87 million -$18.31 million -24.27
Carvana Competitors $8.01 billion $220.42 million 12.00

Carvana’s peers have higher revenue and earnings than Carvana. Carvana is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Carvana peers beat Carvana on 8 of the 11 factors compared.

Carvana Company Profile

Carvana Co., together with its subsidiaries, operates an e-commerce platform for buying used cars in the United States. The company purchases, reconditions, sells, and delivers vehicles. Its platform allows customers to research and identify a vehicle; inspect it using company's proprietary 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up. The company was founded in 2012 and is headquartered in Tempe, Arizona.

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