Stitch Fix (NASDAQ:SFIX – Get Free Report) and CarMax (NYSE:KMX – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.
Risk and Volatility
Stitch Fix has a beta of 2.26, indicating that its share price is 126% more volatile than the S&P 500. Comparatively, CarMax has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Stitch Fix and CarMax, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stitch Fix | 1 | 4 | 1 | 0 | 2.00 |
| CarMax | 3 | 14 | 2 | 1 | 2.05 |
Valuation & Earnings
This table compares Stitch Fix and CarMax”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stitch Fix | $1.27 billion | 0.35 | -$28.74 million | ($0.08) | -41.75 |
| CarMax | $25.88 billion | 0.34 | $247.29 million | $1.53 | 40.61 |
CarMax has higher revenue and earnings than Stitch Fix. Stitch Fix 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 Stitch Fix and CarMax’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stitch Fix | -1.43% | -9.35% | -3.78% |
| CarMax | 0.84% | 6.64% | 1.53% |
Insider and Institutional Ownership
71.0% of Stitch Fix shares are held by institutional investors. 16.1% of Stitch Fix shares are held by insiders. Comparatively, 1.0% of CarMax shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
CarMax beats Stitch Fix on 10 of the 15 factors compared between the two stocks.
About Stitch Fix
Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.
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.
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