Head to Head Analysis: Lithia Motors (NYSE:LAD) versus RideNow Group (NASDAQ:RDNW)

Lithia Motors (NYSE:LAD) and RideNow Group (NASDAQ:RDNW) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Valuation and Earnings

This table compares Lithia Motors and RideNow Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lithia Motors	$37.94 billion	0.17	$819.60 million	$30.15	9.66
RideNow Group	$1.08 billion	0.17	-$52.40 million	($0.23)	-21.09

Lithia Motors has higher revenue and earnings than RideNow Group. RideNow Group is trading at a lower price-to-earnings ratio than Lithia Motors, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Lithia Motors and RideNow Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lithia Motors	0	5	7	0	2.58
RideNow Group	1	2	0	0	1.67

Lithia Motors presently has a consensus target price of $415.10, indicating a potential upside of 42.58%. RideNow Group has a consensus target price of $8.50, indicating a potential upside of 75.26%. Given RideNow Group’s higher possible upside, analysts clearly believe RideNow Group is more favorable than Lithia Motors.

Institutional and Insider Ownership

66.1% of RideNow Group shares are held by institutional investors. 1.1% of Lithia Motors shares are held by insiders. Comparatively, 55.3% of RideNow Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Lithia Motors has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, RideNow Group has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Lithia Motors and RideNow Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lithia Motors	1.88%	12.16%	3.14%
RideNow Group	-0.76%	N/A	-1.17%

Summary

Lithia Motors beats RideNow Group on 9 of the 14 factors compared between the two stocks.

About Lithia Motors

Lithia Motors, Inc. operates as an automotive retailer worldwide. It operates in two segments, Vehicle Operations and Financing Operations. The company’s Vehicle Operations segment sells new and used vehicles; provides parts, repair, and maintenance services; vehicle finance; and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles. The company sells its products and services through the Driveway and Greencars brand names through a network of locations, e-commerce platforms, and captive finance solutions. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.

About RideNow Group

RumbleOn, Inc. primarily operates as a powersports retailer in the United States. It operates in two segments, Powersports and Vehicle Transportation Services. The Powersports segment provides new and pre-owned motorcycles, all-terrain vehicles, utility terrain or side-by-side vehicles, personal watercraft, snowmobiles, and other powersports products. It also offers parts, apparel, accessories, finance and insurance products and services, and aftermarket products, as well as repair and maintenance services. The Vehicle Transportation Services segment provides asset-light transportation brokerage services facilitating automobile transportation. The company was formerly known as Smart Server, Inc. and changed its name to RumbleOn, Inc. in February 2017. The company was incorporated in 2013 and is based in Irving, Texas.