CarMax (NYSE:KMX) & Revolve Group (NYSE:RVLV) Head-To-Head Survey

CarMax (NYSE:KMX) and Revolve Group (NYSE:RVLV) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Valuation & Earnings

This table compares CarMax and Revolve Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CarMax	$25.88 billion	0.29	$247.29 million	$2.05	25.92
Revolve Group	$1.31 billion	1.04	$61.71 million	$0.92	20.83

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

Profitability

This table compares CarMax and Revolve Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CarMax	1.06%	7.76%	1.81%
Revolve Group	4.81%	12.52%	8.14%

Risk & Volatility

CarMax has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Revolve Group has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Institutional and Insider Ownership

67.6% of Revolve Group shares are owned by institutional investors. 1.0% of CarMax shares are owned by company insiders. Comparatively, 42.7% of Revolve Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for CarMax and Revolve Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarMax	1	14	3	1	2.21
Revolve Group	0	6	8	0	2.57

CarMax currently has a consensus price target of $58.00, suggesting a potential upside of 9.15%. Revolve Group has a consensus price target of $29.17, suggesting a potential upside of 52.23%. Given Revolve Group’s stronger consensus rating and higher possible upside, analysts clearly believe Revolve Group is more favorable than CarMax.

Summary

Revolve Group beats CarMax on 10 of the 15 factors compared between the two stocks.

About CarMax

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.

About Revolve Group

Revolve Group, Inc. operates as an online fashion retailer for millennial and generation z consumers in the United States and internationally. The company operates in two segments, REVOLVE and FWRD. It operates a platform that connects consumers and global fashion influencers, as well as emerging, established, and owned brands. The company offers apparel, footwear, accessories, beauty, and home products from emerging, established, and owned brands, as well as luxury brands through its websites and mobile apps. The company was formerly known as Advance Holdings, LLC and changed its name to Revolve Group, Inc. in October 2018. Revolve Group, Inc. was founded in 2003 and is headquartered in Cerritos, California.