Head-To-Head Comparison: Vroom (NASDAQ:VRM) versus Rush Enterprises (NASDAQ:RUSHA)

Vroom (NASDAQ:VRM) and Rush Enterprises (NASDAQ:RUSHA) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Profitability

This table compares Vroom and Rush Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vroom -11.60% -19.80% -12.83%
Rush Enterprises 3.57% 13.81% 5.99%

Institutional and Insider Ownership

96.4% of Vroom shares are held by institutional investors. Comparatively, 73.3% of Rush Enterprises shares are held by institutional investors. 17.4% of Vroom shares are held by insiders. Comparatively, 12.4% of Rush Enterprises shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Vroom and Rush Enterprises, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vroom 0 3 9 0 2.75
Rush Enterprises 0 2 0 0 2.00

Vroom presently has a consensus price target of $52.27, indicating a potential upside of 144.84%. Rush Enterprises has a consensus price target of $53.00, indicating a potential upside of 10.83%. Given Vroom’s stronger consensus rating and higher probable upside, analysts clearly believe Vroom is more favorable than Rush Enterprises.

Earnings & Valuation

This table compares Vroom and Rush Enterprises’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vroom $1.36 billion 2.15 -$202.80 million ($2.44) -8.75
Rush Enterprises $4.74 billion 0.56 $114.89 million $2.04 23.44

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

Volatility and Risk

Vroom has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

About Vroom

Vroom, Inc. operates an e-commerce platform for buying and selling of new and used cars in the United States. It also offers financing solutions. The company was formerly known as Auto America, Inc. and changed its name to Vroom, Inc. in July 2015. The company was incorporated in 2012 and is headquartered in New York, New York.

About Rush Enterprises

Rush Enterprises, Inc. engages in the provision of commercial vehicle industry solutions through its network of commercial vehicle dealerships The firm provides an integrated, one-stop approach to the service and sales of new and used heavy- and medium-duty trucks, aftermarket parts, service, collision center capabilities, chrome accessories, tires, engineered vehicle modification solutions, and a range of financial services including financing, insurance and leasing, and rental options. Its also sells commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, Mitsubishi Fuso, IC Bus, and Blue Bird. The company was founded by W. Marvin Rush in 1965 and is headquartered in New Braunfels, TX.

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