Head-To-Head Comparison: Lithia Motors (NYSE:LAD) & Chewy (NYSE:CHWY)

Chewy (NYSE:CHWY) and Lithia Motors (NYSE:LAD) are both mid-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Valuation & Earnings

This table compares Chewy and Lithia Motors”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chewy	$12.60 billion	0.72	$222.80 million	$0.66	34.43
Lithia Motors	$38.21 billion	0.17	$819.60 million	$34.76	8.56

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

Analyst Recommendations

This is a breakdown of recent recommendations for Chewy and Lithia Motors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chewy	0	8	16	1	2.72
Lithia Motors	0	6	6	0	2.50

Chewy presently has a consensus target price of $30.45, suggesting a potential upside of 34.01%. Lithia Motors has a consensus target price of $393.80, suggesting a potential upside of 32.41%. Given Chewy’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Chewy is more favorable than Lithia Motors.

Risk & Volatility

Chewy has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Lithia Motors has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Insider & Institutional Ownership

93.1% of Chewy shares are held by institutional investors. 0.3% of Chewy shares are held by company insiders. Comparatively, 1.1% of Lithia Motors shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Chewy and Lithia Motors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chewy	2.09%	60.88%	7.83%
Lithia Motors	2.06%	12.05%	3.03%

Summary

Chewy beats Lithia Motors on 11 of the 15 factors compared between the two stocks.

About Chewy

Chewy, Inc. is an online retailer focused on pet food, supplies and related services. Through its website and mobile app, the company sells products for dogs, cats and other pets, including food, treats, toys, bedding and grooming supplies. Chewy also offers pet medications and health products through Chewy Pharmacy, along with services such as veterinary care. Its business combines product sales with services designed to support pet owners throughout their pets’ lives. Founded in 2011, Chewy primarily serves customers in the United States.

About Lithia Motors

Lithia Motors, Inc. is an automotive retailer that sells new and pre-owned vehicles through a network of franchised dealerships. Its dealerships represent a range of vehicle manufacturers and also offer related products and services, including parts, maintenance and repairs, and vehicle financing and insurance options. The company traces its roots to a single dealership established in Ashland, Oregon, in 1946. It has since expanded its retail operations across the United States, Canada and the United Kingdom.