Critical Comparison: LY (OTCMKTS:YAHOY) versus Carvana (NYSE:CVNA)

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

Volatility and Risk

Carvana has a beta of 3.57, suggesting that its share price is 257% more volatile than the S&P 500. Comparatively, LY has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Carvana and LY, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carvana	0	6	12	0	2.67
LY	0	1	0	1	3.00

Carvana presently has a consensus price target of $383.4706, indicating a potential upside of 9.56%. Given Carvana’s higher probable upside, analysts clearly believe Carvana is more favorable than LY.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carvana	$13.67 billion	5.51	$210.00 million	$3.99	87.72
LY	$12.59 billion	1.78	$1.01 billion	$0.27	23.85

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

Institutional and Insider Ownership

56.7% of Carvana shares are held by institutional investors. 16.4% of Carvana shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Carvana	3.46%	40.57%	6.60%
LY	7.78%	5.90%	2.18%

Summary

Carvana beats LY on 11 of the 15 factors compared between the two stocks.

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.

About LY

LY Corporation engages in the online advertising and e-commerce businesses in Japan. The company provides LINE, a communication app; and Yahoo! JAPAN, an internet service that offers search, news, weather, shopping, auction, and other services. It also offers reuse, membership, and payment-related services. The company was formerly known as Z Holdings Corporation and changed its name to LY Corporation in October 2023. LY Corporation was founded in 1996 and is headquartered in Chiyoda, Japan. LY Corporation operates as a subsidiary of A Holdings Corporation.