Carvana vs Vroom Which Is More Profitable?

Carvana and Vroom are two leading players in the burgeoning online car dealership industry, revolutionizing how consumers buy and sell vehicles. Both companies offer a streamlined and convenient purchasing experience, with extensive inventories and transparent pricing. However, the stocks of Carvana and Vroom have followed different trajectories in the stock market, reflecting varying investor sentiments and market conditions. Understanding the key differences and similarities between these two companies can provide valuable insights for investors looking to capitalize on the growing trend of digital car sales.

Carvana or Vroom?

When comparing Carvana and Vroom, 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 Vroom.

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 Vroom 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, Vroom 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 1828.73 and Vroom's P/E ratio at -0.03. 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 50.88 while Vroom's P/B ratio is 1.93.

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 Vroom's is -0.94%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Carvana's ROE at 4.07% and Vroom's ROE at -462.92%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $237.80 for Carvana and $5.01 for Vroom. Over the past year, Carvana's prices ranged from $38.41 to $268.34, with a yearly change of 598.62%. Vroom's prices fluctuated between $4.25 and $76.93, with a yearly change of 1710.07%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.