Carvana (NYSE:CVNA – Get Free Report) and Sally Beauty (NYSE:SBH – 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 dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.
Profitability
This table compares Carvana and Sally Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Carvana | 6.26% | 37.06% | 12.21% |
| Sally Beauty | 5.16% | 24.36% | 7.07% |
Valuation and Earnings
This table compares Carvana and Sally Beauty”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Carvana | $20.32 billion | 3.48 | $1.41 billion | $1.81 | 35.48 |
| Sally Beauty | $3.70 billion | 0.43 | $195.88 million | $1.92 | 8.86 |
Carvana has higher revenue and earnings than Sally Beauty. Sally Beauty 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
Carvana has a beta of 3.49, suggesting that its share price is 249% more volatile than the S&P 500. Comparatively, Sally Beauty has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Carvana and Sally Beauty, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Carvana | 0 | 8 | 15 | 1 | 2.71 |
| Sally Beauty | 1 | 3 | 3 | 0 | 2.29 |
Carvana presently has a consensus price target of $84.14, suggesting a potential upside of 31.03%. Sally Beauty has a consensus price target of $17.40, suggesting a potential upside of 2.33%. Given Carvana’s stronger consensus rating and higher probable upside, equities analysts clearly believe Carvana is more favorable than Sally Beauty.
Institutional and Insider Ownership
56.7% of Carvana shares are held by institutional investors. 15.2% of Carvana shares are held by insiders. Comparatively, 2.0% of Sally Beauty shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Carvana beats Sally Beauty on 14 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 Sally Beauty
Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under Wella and L'Oreal brands. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under Paul Mitchell and Wella brands. It operates stores and franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. The company distributes its products through full-service/exclusive distributors and open-line distributors. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.
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