Reviewing Carvana (NYSE:CVNA) and ARKO (NASDAQ:ARKO)

ARKO (NASDAQ:ARKO) and Carvana (NYSE:CVNA) 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.

Valuation & Earnings

This table compares ARKO and Carvana”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARKO	$7.64 billion	0.06	$22.74 million	$0.07	54.43
Carvana	$20.32 billion	3.13	$1.41 billion	$1.81	31.91

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

Risk and Volatility

ARKO has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Carvana has a beta of 3.55, indicating that its share price is 255% more volatile than the S&P 500.

Profitability

This table compares ARKO and Carvana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARKO	0.19%	4.02%	0.41%
Carvana	6.26%	37.06%	12.21%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for ARKO and Carvana, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARKO	1	1	1	0	2.00
Carvana	0	8	16	1	2.72

ARKO presently has a consensus target price of $14.50, indicating a potential upside of 280.58%. Carvana has a consensus target price of $82.83, indicating a potential upside of 43.41%. Given ARKO’s higher possible upside, analysts clearly believe ARKO is more favorable than Carvana.

Insider and Institutional Ownership

78.3% of ARKO shares are held by institutional investors. Comparatively, 56.7% of Carvana shares are held by institutional investors. 21.9% of ARKO shares are held by insiders. Comparatively, 15.2% of Carvana 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

Carvana beats ARKO on 11 of the 15 factors compared between the two stocks.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.

About Carvana

Carvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. The company also operates auction sites. The company was founded in 2012 and is based in Tempe, Arizona.