Cars.com vs CarMax Which Is More Reliable?

Both Cars.com and CarMax are prominent players in the automotive industry, but they operate in different sectors of the market. Cars.com is an online marketplace connecting buyers and sellers while CarMax is a retailer specializing in used vehicles. Both stocks may appeal to investors looking to capitalize on the growing demand for cars, but there are distinct differences in their business models and growth potential. Analyzing key metrics such as revenue, profitability, and market share can help investors make informed decisions on which stock to invest in.

Cars.com or CarMax?

When comparing Cars.com and CarMax, 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 Cars.com and CarMax.

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. Cars.com has a dividend yield of -%, while CarMax has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Cars.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, CarMax 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 Cars.com P/E ratio at 30.90 and CarMax's P/E ratio at 32.20. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Cars.com P/B ratio is 2.41 while CarMax's P/B ratio is 2.18.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Cars.com has seen a 5-year revenue growth of 0.10%, while CarMax's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cars.com's ROE at 7.95% and CarMax's ROE at 6.83%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $18.22 for Cars.com and $85.53 for CarMax. Over the past year, Cars.com's prices ranged from $15.05 to $21.24, with a yearly change of 41.13%. CarMax's prices fluctuated between $65.83 and $88.22, with a yearly change of 34.01%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.