CarMax (NYSE:KMX – Get Free Report) and Brilliant Earth Group (NASDAQ:BRLT – Get Free Report) 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, analyst recommendations, institutional ownership, dividends, valuation and earnings.
Profitability
This table compares CarMax and Brilliant Earth 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% |
| Brilliant Earth Group | -0.66% | -15.48% | -5.99% |
Risk and Volatility
CarMax has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Brilliant Earth Group has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations for CarMax and Brilliant Earth Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CarMax | 1 | 14 | 3 | 1 | 2.21 |
| Brilliant Earth Group | 1 | 7 | 0 | 0 | 1.88 |
CarMax presently has a consensus target price of $57.85, suggesting a potential upside of 8.38%. Brilliant Earth Group has a consensus target price of $1.74, suggesting a potential upside of 15.83%. Given Brilliant Earth Group’s higher possible upside, analysts plainly believe Brilliant Earth Group is more favorable than CarMax.
Valuation and Earnings
This table compares CarMax and Brilliant Earth Group”s gross revenue, earnings per share 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 | 26.04 |
| Brilliant Earth Group | $437.48 million | 0.35 | -$3.63 million | ($0.29) | -5.17 |
CarMax has higher revenue and earnings than Brilliant Earth Group. Brilliant Earth Group is trading at a lower price-to-earnings ratio than CarMax, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
70.4% of Brilliant Earth Group shares are held by institutional investors. 1.0% of CarMax shares are held by insiders. Comparatively, 83.2% of Brilliant Earth Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
CarMax beats Brilliant Earth Group 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 Brilliant Earth Group
Brilliant Earth Group, Inc. designs, procures, and sells diamonds, gemstones, and jewelry in the United States and internationally. The company’s product assortment and merchandise include a collection of diamond engagement rings, wedding and anniversary rings, gemstone rings, and fine jewelry. It sells directly to consumers through its omnichannel sales platform, including e-commerce and showrooms. Brilliant Earth Group, Inc. was founded in 2005 and is headquartered in San Francisco, California.
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