Carvana (NYSE:CVNA) and PDD (NASDAQ:PDD) Head-To-Head Contrast

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for PDD and Carvana, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDD	0	10	4	0	2.29
Carvana	0	6	18	1	2.80

PDD currently has a consensus target price of $140.57, indicating a potential upside of 37.00%. Carvana has a consensus target price of $440.59, indicating a potential upside of 42.52%. Given Carvana’s stronger consensus rating and higher possible upside, analysts clearly believe Carvana is more favorable than PDD.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PDD	24.46%	29.31%	18.47%
Carvana	6.92%	50.96%	13.63%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDD	$53.96 billion	2.65	$15.40 billion	$9.58	10.71
Carvana	$20.32 billion	3.33	$1.41 billion	$8.04	38.45

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

Volatility and Risk

PDD has a beta of -0.01, suggesting that its stock price is 101% less volatile than the S&P 500. Comparatively, Carvana has a beta of 3.6, suggesting that its stock price is 260% more volatile than the S&P 500.

Institutional and Insider Ownership

39.8% of PDD shares are held by institutional investors. Comparatively, 56.7% of Carvana shares are held by institutional investors. 3.7% of PDD shares are held by insiders. Comparatively, 17.1% 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.

Summary

Carvana beats PDD on 10 of the 15 factors compared between the two stocks.

About PDD

PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.

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.