Carvana vs Cazoo Which Should You Buy?

Carvana and Cazoo are two leading players in the online used car retailing industry, both offering consumers a convenient and streamlined way to purchase pre-owned vehicles. While Carvana is a well-established company in the United States, Cazoo has rapidly grown its presence in the UK market. Investors are closely watching the performance of these stocks as they compete for market share and strive to capitalize on the growing trend of online car buying. Both companies have experienced significant growth in recent years, making them attractive investment opportunities in the automotive sector.

Carvana or Cazoo?

When comparing Carvana and Cazoo, 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 Carvana and Cazoo.

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. Carvana has a dividend yield of -%, while Cazoo has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Carvana reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Cazoo 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 Carvana P/E ratio at 1822.25 and Cazoo'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. Carvana P/B ratio is 50.70 while Cazoo's P/B ratio is -2.29.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Carvana has seen a 5-year revenue growth of 0.51%, while Cazoo's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Carvana's ROE at 4.07% and Cazoo's ROE at 0.00%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $246.85 for Carvana and $5.85 for Cazoo. Over the past year, Carvana's prices ranged from $27.75 to $259.39, with a yearly change of 834.74%. Cazoo's prices fluctuated between $2.11 and $189.00, with a yearly change of 8857.35%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.