Critical Survey: Grabagun Digital (NYSE:PEW) vs. AutoNation (NYSE:AN)

Grabagun Digital (NYSE:PEW) and AutoNation (NYSE:AN) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Risk & Volatility

Grabagun Digital has a beta of -0.08, meaning that its stock price is 108% less volatile than the S&P 500. Comparatively, AutoNation has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares Grabagun Digital and AutoNation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grabagun Digital	-6.42%	-6.15%	-5.16%
AutoNation	2.82%	31.24%	4.97%

Institutional & Insider Ownership

4.8% of Grabagun Digital shares are held by institutional investors. Comparatively, 94.6% of AutoNation shares are held by institutional investors. 27.8% of Grabagun Digital shares are held by insiders. Comparatively, 1.4% of AutoNation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Grabagun Digital and AutoNation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grabagun Digital	$96.45 million	0.66	-$2.51 million	($0.23)	-9.37
AutoNation	$27.63 billion	0.20	$649.10 million	$21.59	7.72

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

Analyst Recommendations

This is a breakdown of current ratings for Grabagun Digital and AutoNation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grabagun Digital	1	0	1	0	2.00
AutoNation	0	3	9	0	2.75

Grabagun Digital presently has a consensus target price of $5.00, indicating a potential upside of 132.02%. AutoNation has a consensus target price of $246.50, indicating a potential upside of 47.95%. Given Grabagun Digital’s higher probable upside, equities analysts clearly believe Grabagun Digital is more favorable than AutoNation.

Summary

AutoNation beats Grabagun Digital on 11 of the 14 factors compared between the two stocks.

About Grabagun Digital

GrabAGun.com is an online retailer of firearms, ammunition and related accessories. GrabAGun.com, formerly known as Colombier Acquisition Corp. II, is based in COPPELL, Texas.

About AutoNation

AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products; and indirect financing for vehicles, as well as arranges finance for vehicle purchases through third-party finance sources. It owns and operates new vehicle franchises from stores located primarily in metropolitan markets in the Sunbelt region, as well as AutoNation-branded collision centers, AutoNation USA used vehicle stores, AutoNation-branded automotive auction operations, and parts distribution centers. The company was formerly known as Republic Industries, Inc. and changed its name to AutoNation, Inc. in 1999. AutoNation, Inc. was incorporated in 1980 and is headquartered in Fort Lauderdale, Florida.