Tesla vs CarMax Which Is Stronger?

Tesla and CarMax are two prominent companies in the automotive industry, each with a unique position in the market. Tesla, known for its cutting-edge electric vehicles and innovative technologies, has experienced significant growth in recent years, making it a top choice for investors seeking exposure to the future of transportation. On the other hand, CarMax operates as a retailer of used cars, offering a different investment opportunity for those looking for stability in the automotive sector. In this comparison, we will analyze the performance of Tesla and CarMax stocks, examining their strengths, weaknesses, and potential for future growth.

Tesla or CarMax?

When comparing Tesla 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 Tesla 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. Tesla 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. Tesla 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 Tesla P/E ratio at 106.93 and CarMax's P/E ratio at 32.48. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Tesla P/B ratio is 19.43 while CarMax's P/B ratio is 2.19.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Tesla has seen a 5-year revenue growth of 2.63%, while CarMax's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Tesla's ROE at 19.29% and CarMax's ROE at 6.83%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $402.38 for Tesla and $86.57 for CarMax. Over the past year, Tesla's prices ranged from $138.80 to $424.88, with a yearly change of 206.11%. 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.