Contrasting PDD (NASDAQ:PDD) and Carvana (NYSE:CVNA)

Carvana (NYSE:CVNA) and PDD (NASDAQ:PDD) are both large-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Volatility & Risk

Carvana has a beta of 3.6, suggesting that its stock price is 260% more volatile than the S&P 500. Comparatively, PDD has a beta of -0.01, suggesting that its stock price is 101% less volatile than the S&P 500.

Earnings and Valuation

This table compares Carvana and PDD”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carvana	$20.32 billion	3.22	$1.41 billion	$8.04	37.21
PDD	$53.96 billion	2.48	$15.40 billion	$9.58	10.05

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Carvana	6.92%	50.96%	13.63%
PDD	24.46%	29.31%	18.47%

Institutional & Insider Ownership

56.7% of Carvana shares are owned by institutional investors. Comparatively, 39.8% of PDD shares are owned by institutional investors. 16.4% of Carvana shares are owned by company insiders. Comparatively, 3.7% of PDD shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Carvana and PDD, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carvana	0	5	19	1	2.84
PDD	0	10	4	0	2.29

Carvana presently has a consensus target price of $440.59, indicating a potential upside of 47.26%. PDD has a consensus target price of $140.57, indicating a potential upside of 46.05%. Given Carvana’s stronger consensus rating and higher possible upside, equities analysts plainly believe Carvana is more favorable than PDD.

Summary

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

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.

About PDD

PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.