CarMax vs TrueCar Which Is Stronger?

CarMax and TrueCar are two leading companies in the automotive industry, both offering unique ways for customers to buy and sell cars. CarMax is known for its nationwide network of dealerships where customers can browse a wide selection of pre-owned vehicles and receive competitive trade-in offers. TrueCar, on the other hand, is an online platform that connects customers with dealerships to receive transparent pricing information and guaranteed savings on new and used cars. Both companies have seen fluctuations in their stock prices, with each facing unique challenges and opportunities in the ever-evolving automotive market.

CarMax or TrueCar?

When comparing CarMax and TrueCar, 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 TrueCar.

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 TrueCar has a dividend yield of 0%. 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, TrueCar 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 28.66 and TrueCar's P/E ratio at 0.00. 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 1.94 while TrueCar's P/B ratio is 0.00.

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 TrueCar's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CarMax's ROE at 6.83% and TrueCar's ROE at 0.00%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $75.63 for CarMax and $0.00 for TrueCar. Over the past year, CarMax's prices ranged from $62.45 to $88.22, with a yearly change of 41.27%. TrueCar's prices fluctuated between $0.00 and $0.00, with a yearly change of 0.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.