Comparing AutoNation (NYSE:AN) and RideNow Group (NASDAQ:RDNW)

RideNow Group (NASDAQ:RDNW) and AutoNation (NYSE:AN) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Valuation & Earnings

This table compares RideNow Group and AutoNation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RideNow Group	$1.10 billion	0.20	-$52.40 million	($0.23)	-24.48
AutoNation	$27.63 billion	0.24	$649.10 million	$21.59	9.42

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

Institutional and Insider Ownership

66.1% of RideNow Group shares are held by institutional investors. Comparatively, 94.6% of AutoNation shares are held by institutional investors. 55.3% of RideNow Group shares are held by company insiders. Comparatively, 1.4% of AutoNation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

RideNow Group has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, AutoNation has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares RideNow Group and AutoNation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RideNow Group	-0.76%	-2,628.57%	-1.17%
AutoNation	2.82%	31.24%	4.97%

Analyst Ratings

This is a breakdown of current recommendations and price targets for RideNow Group and AutoNation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RideNow Group	1	2	0	0	1.67
AutoNation	0	2	10	0	2.83

RideNow Group currently has a consensus price target of $8.50, indicating a potential upside of 50.98%. AutoNation has a consensus price target of $250.00, indicating a potential upside of 22.96%. Given RideNow Group’s higher possible upside, analysts clearly believe RideNow Group is more favorable than AutoNation.

Summary

AutoNation beats RideNow Group on 11 of the 14 factors compared between the two stocks.

About RideNow Group

RumbleOn, Inc. primarily operates as a powersports retailer in the United States. It operates in two segments, Powersports and Vehicle Transportation Services. The Powersports segment provides new and pre-owned motorcycles, all-terrain vehicles, utility terrain or side-by-side vehicles, personal watercraft, snowmobiles, and other powersports products. It also offers parts, apparel, accessories, finance and insurance products and services, and aftermarket products, as well as repair and maintenance services. The Vehicle Transportation Services segment provides asset-light transportation brokerage services facilitating automobile transportation. The company was formerly known as Smart Server, Inc. and changed its name to RumbleOn, Inc. in February 2017. The company was incorporated in 2013 and is based in Irving, 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.