Contrasting Carvana (NYSE:CVNA) & eBay (NASDAQ:EBAY)

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for eBay and Carvana, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eBay	1	19	13	0	2.36
Carvana	0	5	17	2	2.88

eBay currently has a consensus price target of $108.61, suggesting a potential downside of 5.42%. Carvana has a consensus price target of $93.14, suggesting a potential upside of 35.55%. Given Carvana’s stronger consensus rating and higher possible upside, analysts plainly believe Carvana is more favorable than eBay.

Earnings & Valuation

This table compares eBay and Carvana”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eBay	$11.10 billion	4.59	$2.03 billion	$4.41	26.04
Carvana	$20.32 billion	3.71	$1.41 billion	$1.64	41.90

eBay has higher earnings, but lower revenue than Carvana. eBay 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 eBay and Carvana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eBay	17.58%	46.11%	11.97%
Carvana	6.40%	41.46%	12.48%

Volatility and Risk

eBay has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Carvana has a beta of 3.46, indicating that its share price is 246% more volatile than the S&P 500.

Insider & Institutional Ownership

87.5% of eBay shares are held by institutional investors. Comparatively, 56.7% of Carvana shares are held by institutional investors. 0.7% of eBay shares are held by insiders. Comparatively, 15.2% of Carvana shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Carvana beats eBay on 9 of the 15 factors compared between the two stocks.

About eBay

eBay Inc., together with its subsidiaries, operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. The company’s marketplace platform includes its online marketplace at ebay.com, off-platform businesses, and the eBay suite of mobile apps. Its platforms enable users to list, sell, and buy various products. The company was founded in 1995 and is headquartered in San Jose, California.

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.