Vroom (NASDAQ:VRM – Get Free Report) and PACCAR (NASDAQ:PCAR – Get Free Report) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.
Valuation and Earnings
This table compares Vroom and PACCAR”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vroom | $178.83 million | 0.33 | -$7.96 million | ($8.64) | -1.29 |
| PACCAR | $28.44 billion | 2.04 | $2.38 billion | $4.70 | 23.47 |
Analyst Recommendations
This is a summary of recent ratings and price targets for Vroom and PACCAR, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vroom | 1 | 0 | 0 | 0 | 1.00 |
| PACCAR | 0 | 10 | 5 | 1 | 2.44 |
PACCAR has a consensus price target of $122.00, suggesting a potential upside of 10.59%. Given PACCAR’s stronger consensus rating and higher probable upside, analysts plainly believe PACCAR is more favorable than Vroom.
Volatility and Risk
Vroom has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, PACCAR has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.
Profitability
This table compares Vroom and PACCAR’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vroom | -4.45% | -4.47% | -0.64% |
| PACCAR | 8.91% | 12.81% | 5.62% |
Insider & Institutional Ownership
25.8% of Vroom shares are owned by institutional investors. Comparatively, 64.9% of PACCAR shares are owned by institutional investors. 2.9% of Vroom shares are owned by company insiders. Comparatively, 2.0% of PACCAR shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
PACCAR beats Vroom on 13 of the 15 factors compared between the two stocks.
About Vroom
Vroom, Inc. operates as an automotive finance company. The company offers vehicle financing to its customers through third party dealers under the UACC brand. It also provides artificial intelligence powered analytics and digital services to dealers, automotive financial services companies, and others in the automotive industry for automotive retail. The company was formerly known as Auto America, Inc. and changed its name to Vroom, Inc. in July 2015. Vroom, Inc. was incorporated in 2012 and is based in Houston, Texas.
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.
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