Carvana (NASDAQ: CVNA) and America’s Car-Mart (NASDAQ:CRMT) are both small-cap cyclical consumer goods & services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitabiliy, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Carvana and America’s Car-Mart, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carvana 0 1 9 0 2.90
America’s Car-Mart 0 2 1 0 2.33

Carvana presently has a consensus price target of $19.78, indicating a potential downside of 1.99%. America’s Car-Mart has a consensus price target of $41.00, indicating a potential upside of 8.90%. Given America’s Car-Mart’s higher possible upside, analysts clearly believe America’s Car-Mart is more favorable than Carvana.

Insider & Institutional Ownership

83.9% of America’s Car-Mart shares are owned by institutional investors. 11.7% of America’s Car-Mart shares are owned by 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.

Earnings and Valuation

This table compares Carvana and America’s Car-Mart’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carvana N/A N/A N/A N/A N/A
America’s Car-Mart $587.75 million 0.48 $41.79 million $2.50 15.06

America’s Car-Mart has higher revenue and earnings than Carvana.

Profitability

This table compares Carvana and America’s Car-Mart’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carvana -24.16% N/A -45.03%
America’s Car-Mart 3.43% 8.82% 4.80%

Summary

America’s Car-Mart beats Carvana on 7 of the 9 factors compared between the two stocks.

Carvana Company Profile

Carvana Co. is an e-commerce platform for buying used cars. On the Company’s platform, consumers can research and identify a vehicle, inspect it using its proprietary 360-degree vehicle imaging technology, obtain financing and warranty coverage, purchase the vehicle and schedule delivery or pick-up, all from their desktop or mobile devices. The Company’s transaction technologies and online platform transform a traditionally time consuming process by allowing customers to secure financing, complete a purchase and schedule delivery online.

America’s Car-Mart Company Profile

America’s Car-Mart, Inc. is an automotive retailer focused on the integrated auto sales and finance segment of the used car market. The Company conducts its operations through its two operating subsidiaries, America’s Car Mart, Inc. (Car-Mart of Arkansas) and Colonial Auto Finance, Inc. (Colonial) (Collectively, Car-Mart of Arkansas and Colonial are referred to as Car-Mart). It primarily sells older model used vehicles and provides financing for all of its customers. As of April 30, 2016, the Company operated 143 dealerships located primarily in small cities throughout the South-Central United States. Dealerships are operated on a decentralized basis. Each dealership is responsible for buying (with the assistance of a corporate office buyer) and selling vehicles, making credit decisions, and servicing and collecting the installment contracts it originates. Dealerships also maintain their own records and make daily deposits. The Company has both regular and satellite dealerships.

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