Critical Review: Carvana (NYSE:CVNA) vs. Dingdong (Cayman) (NYSE:DDL)

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

Analyst Recommendations

This is a summary of recent recommendations for Carvana and Dingdong (Cayman), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carvana	0	6	19	0	2.76
Dingdong (Cayman)	1	1	0	0	1.50

Carvana presently has a consensus target price of $473.36, indicating a potential downside of 0.95%. Given Carvana’s stronger consensus rating and higher probable upside, analysts clearly believe Carvana is more favorable than Dingdong (Cayman).

Earnings & Valuation

This table compares Carvana and Dingdong (Cayman)”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	7.60	$210.00 million	$4.38	109.11
Dingdong (Cayman)	$23.52 billion	0.03	$40.43 million	$0.17	16.85

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

Profitability

This table compares Carvana and Dingdong (Cayman)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carvana	3.44%	30.62%	6.88%
Dingdong (Cayman)	1.17%	31.21%	4.04%

Risk and Volatility

Carvana has a beta of 3.54, indicating that its stock price is 254% more volatile than the S&P 500. Comparatively, Dingdong (Cayman) has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Insider & Institutional Ownership

56.7% of Carvana shares are owned by institutional investors. Comparatively, 24.7% of Dingdong (Cayman) shares are owned by institutional investors. 16.4% of Carvana shares are owned by insiders. Comparatively, 29.8% of Dingdong (Cayman) 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.

Summary

Carvana beats Dingdong (Cayman) on 11 of the 14 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 Dingdong (Cayman)

Dingdong (Cayman) Limited operates an e-commerce company in China. The company offers fresh groceries, including vegetables, meat and eggs, fruits, and seafood; prepared food, and other food products, such as baked goods, dairy, seasonings, beverages, instant food, oil, and snacks. It offers its products through traditional offline, as well as online channels through Dingdong Fresh app, mini-programs, and third-party platforms. Dingdong (Cayman) Limited was founded in 2017 and is headquartered in Shanghai, China.