Fox Factory (NASDAQ:FOXF) versus PACCAR (NASDAQ:PCAR) Critical Analysis

Fox Factory (NASDAQ:FOXF) and PACCAR (NASDAQ:PCAR) are both auto/tires/trucks companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Insider and Institutional Ownership

64.9% of PACCAR shares are held by institutional investors. 0.5% of Fox Factory shares are held by company insiders. Comparatively, 2.0% of PACCAR shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Fox Factory and PACCAR”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fox Factory	$1.39 billion	0.58	$6.55 million	($6.18)	-3.12
PACCAR	$28.44 billion	2.34	$2.38 billion	$4.51	28.16

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Fox Factory and PACCAR, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fox Factory	2	3	3	1	2.33
PACCAR	0	11	5	1	2.41

Fox Factory presently has a consensus target price of $30.17, indicating a potential upside of 56.22%. PACCAR has a consensus target price of $116.50, indicating a potential downside of 8.27%. Given Fox Factory’s higher probable upside, analysts plainly believe Fox Factory is more favorable than PACCAR.

Volatility and Risk

Fox Factory has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, PACCAR has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Profitability

This table compares Fox Factory and PACCAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fox Factory	-17.66%	4.84%	2.42%
PACCAR	8.35%	13.97%	6.02%

Summary

PACCAR beats Fox Factory on 12 of the 14 factors compared between the two stocks.

About Fox Factory

Fox Factory Holding Corp. designs, engineers, manufactures, and markets performance-defining products and system worldwide. The company offers powered vehicle products for side-by-side vehicles, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles, snowmobiles, and specialty vehicles and applications, such as military, motorcycles, and commercial trucks; lift kits and components with shock products and aftermarket accessory packages for trucks; and mid-end and high-end front fork and rear suspension products. It also provides suspension tuning services, as well as wheels, off-road tires and accessories. In addition, the company offers mountain and gravel bike wheels, and other performance cycling components, including cranks, chainrings, pedals, bars, stems, and seat posts, as well as baseball and softball products comprising metal bats, wood bats, apparel and accessories, batting gloves, fielding gloves, and bags and protective equipment under the Marucci brand. The company serves aftermarket applications products under the BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4×4 Posi-Lok, Ridetech, Tuscany, Outside Van, SCA, and Custom Wheel House brands; and mountain bikes, e-bikes, and gravel bikes under the FOX, Race Face, Easton Cycling, and Marzocchi brands. Fox Factory Holding Corp. was incorporated in 2007 and is based in Duluth, Georgia.

About PACCAR

PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Canada, Europe, Mexico, South America, Australia, and internationally. It operates through three segments: Truck, Parts, and Financial Services. The Truck segment designs, manufactures, and distributes trucks for the over-the-road and off-highway hauling of commercial and consumer goods. It sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full-service leasing operations under the PacLease trade name, as well as provides finance and leasing products and services to customers and dealers. This segment also offers equipment financing and administrative support services for its franchisees; retail loan and leasing services for small, medium, and large commercial trucking companies, as well as independent owners/operators and other businesses; and truck inventory financing services to independent dealers. In addition, this segment offers loans and leases directly to customers for the acquisition of trucks and related equipment. The company also manufactures and markets industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington.