Analyzing Chewy (NYSE:CHWY) & Carvana (NYSE:CVNA)

Chewy (NYSE:CHWY) and Carvana (NYSE:CVNA) are both large-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Profitability

This table compares Chewy and Carvana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chewy	3.21%	35.04%	3.89%
Carvana	2.68%	44.86%	4.99%

Risk and Volatility

Chewy has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Carvana has a beta of 3.59, meaning that its share price is 259% more volatile than the S&P 500.

Earnings & Valuation

This table compares Chewy and Carvana”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chewy	$11.86 billion	1.27	$392.74 million	$0.89	40.85
Carvana	$13.67 billion	5.27	$210.00 million	$2.85	118.04

Chewy has higher earnings, but lower revenue than Carvana. Chewy is trading at a lower price-to-earnings ratio than Carvana, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

93.1% of Chewy shares are held by institutional investors. Comparatively, 56.7% of Carvana shares are held by institutional investors. 0.4% of Chewy shares are held by insiders. Comparatively, 16.4% of Carvana shares are held by 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 Ratings

This is a breakdown of recent ratings and price targets for Chewy and Carvana, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chewy	0	8	17	1	2.73
Carvana	0	7	13	0	2.65

Chewy presently has a consensus target price of $43.89, indicating a potential upside of 20.71%. Carvana has a consensus target price of $318.16, indicating a potential downside of 5.43%. Given Chewy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Chewy is more favorable than Carvana.

Summary

Carvana beats Chewy on 8 of the 15 factors compared between the two stocks.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.

About Carvana

Carvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. The company also operates auction sites. The company was founded in 2012 and is based in Tempe, Arizona.