Carvana (NYSE:CVNA) & American Eagle Outfitters (NYSE:AEO) Head to Head Contrast

Carvana (NYSE:CVNA) and American Eagle Outfitters (NYSE:AEO) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Valuation & Earnings

This table compares Carvana and American Eagle Outfitters”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carvana	$20.32 billion	3.52	$1.41 billion	$1.81	35.89
American Eagle Outfitters	$5.50 billion	0.50	$191.98 million	$1.96	8.45

Carvana has higher revenue and earnings than American Eagle Outfitters. American Eagle Outfitters 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 Carvana and American Eagle Outfitters, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carvana	0	8	15	1	2.71
American Eagle Outfitters	1	10	2	1	2.21

Carvana currently has a consensus price target of $84.14, suggesting a potential upside of 29.51%. American Eagle Outfitters has a consensus price target of $19.36, suggesting a potential upside of 16.89%. Given Carvana’s stronger consensus rating and higher possible upside, analysts plainly believe Carvana is more favorable than American Eagle Outfitters.

Profitability

This table compares Carvana and American Eagle Outfitters’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carvana	6.26%	37.06%	12.21%
American Eagle Outfitters	5.91%	23.63%	9.59%

Institutional & Insider Ownership

56.7% of Carvana shares are held by institutional investors. Comparatively, 97.3% of American Eagle Outfitters shares are held by institutional investors. 15.2% of Carvana shares are held by insiders. Comparatively, 8.9% of American Eagle Outfitters shares are held 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.

Volatility & Risk

Carvana has a beta of 3.49, meaning that its share price is 249% more volatile than the S&P 500. Comparatively, American Eagle Outfitters has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Summary

Carvana beats American Eagle Outfitters on 12 of the 14 factors compared between the two stocks.

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.

About American Eagle Outfitters

American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.