CarMax vs Tesla

CarMax and Tesla are two major players in the automotive industry, but they operate in vastly different segments of the market. CarMax is a well-established retailer of used cars, offering a wide selection of vehicles to consumers across the United States. On the other hand, Tesla is a pioneering electric vehicle company, known for its innovative technology and sustainable practices. Both companies have seen significant growth in their respective markets, but investors may see differences in their potential for future success.

CarMax or Tesla?

When comparing CarMax and Tesla, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between CarMax and Tesla.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. CarMax has a dividend yield of -%, while Tesla has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CarMax reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Tesla reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with CarMax P/E ratio at 27.50 and Tesla's P/E ratio at 56.55. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CarMax P/B ratio is 1.86 while Tesla's P/B ratio is 10.54.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CarMax has seen a 5-year revenue growth of 0.99%, while Tesla's is 2.63%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CarMax's ROE at 6.83% and Tesla's ROE at 20.07%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $73.19 for CarMax and $217.12 for Tesla. Over the past year, CarMax's prices ranged from $59.66 to $88.22, with a yearly change of 47.87%. Tesla's prices fluctuated between $138.80 and $271.00, with a yearly change of 95.24%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.