Analyzing Vroom (NASDAQ:VRM) and Polaris (NYSE:PII)

Vroom (NASDAQ:VRM) and Polaris (NYSE:PII) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Insider & Institutional Ownership

25.8% of Vroom shares are held by institutional investors. Comparatively, 88.1% of Polaris shares are held by institutional investors. 1.5% of Vroom shares are held by insiders. Comparatively, 3.1% of Polaris 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.

Earnings & Valuation

This table compares Vroom and Polaris”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	$178.83 million	0.48	-$7.96 million	($8.64)	-1.89
Polaris	$7.15 billion	0.44	-$465.50 million	($8.18)	-6.79

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

Volatility and Risk

Vroom has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Polaris has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Vroom and Polaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vroom	-4.45%	-4.47%	-0.64%
Polaris	-6.51%	-0.05%	-0.01%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Vroom and Polaris, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
Polaris	1	11	0	0	1.92

Polaris has a consensus target price of $59.80, suggesting a potential upside of 7.72%. Given Polaris’ stronger consensus rating and higher probable upside, analysts plainly believe Polaris is more favorable than Vroom.

Summary

Polaris beats Vroom on 8 of the 13 factors compared between the two stocks.

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.

About Polaris

Polaris Inc. designs, engineers, manufactures, and markets powersports vehicles in the United States, Canada, and internationally. It operates through three segments: Off-Road, On-Road, and Marine. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; and moto-roadsters, quadricycles, and boats. It also provides ORV accessories comprising winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil; snowmobile accessories, which include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, such as saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers light duty hauling and passenger vehicles; gear and apparel, such as helmets, goggles, jackets, gloves, boots, bibs, hats, pants, and leathers; and pontoon and deck boats. The company provides its products through dealers and distributors, and online; and retail and e-commerce marketplaces. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1945 and is headquartered in Medina, Minnesota.