SHIFT vs CarMax Which Is More Profitable?

SHIFT Technologies and CarMax are two well-known companies in the automotive industry that offer different approaches to buying and selling cars. SHIFT is a technology-driven platform that allows customers to buy and sell used cars online, while CarMax is a traditional brick-and-mortar dealership known for its wide selection of new and used vehicles. Investors interested in the automotive sector may be considering these two stocks for their portfolios. Let's compare and analyze the performance and potential of SHIFT vs CarMax stocks in this article.

SHIFT or CarMax?

When comparing SHIFT 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 SHIFT 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. SHIFT 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. SHIFT 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 SHIFT P/E ratio at 55.94 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. SHIFT P/B ratio is 9.23 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, SHIFT has seen a 5-year revenue growth of 5.09%, while CarMax's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SHIFT's ROE at 17.69% and CarMax's ROE at 6.83%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥17950.00 for SHIFT and $85.53 for CarMax. Over the past year, SHIFT's prices ranged from ¥8594.00 to ¥36090.00, with a yearly change of 319.94%. 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.