Financial Analysis: Carvana (NYSE:CVNA) versus Winmark (NASDAQ:WINA)

Winmark (NASDAQ:WINA – Get Free Report) and Carvana (NYSE:CVNA – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Winmark and Carvana, as reported by MarketBeat.com.

Carvana has a consensus target price of $84.14, suggesting a potential upside of 24.46%. Given Carvana’s stronger consensus rating and higher possible upside, analysts plainly believe Carvana is more favorable than Winmark.

Valuation and Earnings

This table compares Winmark and Carvana”s revenue, earnings per share (EPS) and valuation.

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

Risk & Volatility

Winmark has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Carvana has a beta of 3.49, suggesting that its share price is 249% more volatile than the S&P 500.

Institutional & Insider Ownership

73.3% of Winmark shares are held by institutional investors. Comparatively, 56.7% of Carvana shares are held by institutional investors. 10.4% of Winmark shares are held by insiders. Comparatively, 15.2% of Carvana shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Summary

Carvana beats Winmark on 10 of the 15 factors compared between the two stocks.

About Winmark

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Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.

About Carvana

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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.