Cars.com vs Carvana Which Is More Attractive?

Cars.com and Carvana are both major players in the automotive industry, but they offer different services to consumers. Cars.com is an online platform that connects car buyers with dealerships and private sellers, while Carvana is a digital platform that allows customers to purchase used cars entirely online. Both companies have seen their stocks fluctuate in recent years, with Cars.com experiencing more stability and Carvana experiencing rapid growth. Investors should carefully consider the strengths and weaknesses of each company before deciding where to put their money.

Cars.com or Carvana?

When comparing Cars.com and Carvana, 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 Carvana.

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 Carvana 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, Carvana 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 32.32 and Carvana's P/E ratio at 1723.58. 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 2.52 while Carvana's P/B ratio is 47.96.

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 Carvana's is 0.51%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Cars.com's ROE at 7.95% and Carvana's ROE at 4.07%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $18.93 for Cars.com and $234.43 for Carvana. Over the past year, Cars.com's prices ranged from $15.05 to $21.24, with a yearly change of 41.13%. Carvana's prices fluctuated between $37.47 and $268.34, with a yearly change of 616.14%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.