O’Reilly Automotive (NASDAQ:ORLY – Get Free Report) and Carvana (NYSE:CVNA – Get Free Report) are both large-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.
Institutional & Insider Ownership
85.0% of O’Reilly Automotive shares are owned by institutional investors. Comparatively, 56.7% of Carvana shares are owned by institutional investors. 0.8% of O’Reilly Automotive shares are owned by insiders. Comparatively, 15.2% of Carvana shares are owned by 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.
Valuation and Earnings
This table compares O’Reilly Automotive and Carvana”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| O’Reilly Automotive | $17.78 billion | 4.00 | $2.54 billion | $3.14 | 27.97 |
| Carvana | $25.06 billion | 3.26 | $1.41 billion | $1.81 | 40.96 |
O’Reilly Automotive has higher earnings, but lower revenue than Carvana. O’Reilly Automotive is trading at a lower price-to-earnings ratio than Carvana, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and recommmendations for O’Reilly Automotive and Carvana, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| O’Reilly Automotive | 0 | 2 | 15 | 1 | 2.94 |
| Carvana | 0 | 7 | 16 | 1 | 2.75 |
O’Reilly Automotive currently has a consensus target price of $107.24, indicating a potential upside of 22.09%. Carvana has a consensus target price of $84.14, indicating a potential upside of 13.49%. Given O’Reilly Automotive’s stronger consensus rating and higher probable upside, analysts plainly believe O’Reilly Automotive is more favorable than Carvana.
Volatility and Risk
O’Reilly Automotive has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Carvana has a beta of 3.46, indicating that its share price is 246% more volatile than the S&P 500.
Profitability
This table compares O’Reilly Automotive and Carvana’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| O’Reilly Automotive | 14.27% | -232.45% | 15.79% |
| Carvana | 6.26% | 37.06% | 12.21% |
Summary
O’Reilly Automotive beats Carvana on 8 of the 14 factors compared between the two stocks.
About O’Reilly Automotive
O’Reilly Automotive, Inc., together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, and Mexico. The company provides new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting products, and oil and wiper blades; and accessories, including floor mats, seat covers, and truck accessories. It also offers auto body paint and related materials, automotive tools, and professional service provider service equipment. In addition, the company provide enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; and professional paint shop mixing and related materials. Further, it offers do-it-yourself and professional service for domestic and imported automobiles, vans, and trucks. The company was founded in 1957 and is headquartered in Springfield, Missouri.
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.
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