CarMax (NYSE:KMX) vs. Lazydays (NASDAQ:GORV) Critical Analysis

Lazydays (NASDAQ:GORV) and CarMax (NYSE:KMX) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Institutional and Insider Ownership

89.7% of Lazydays shares are owned by institutional investors. 61.5% of Lazydays shares are owned by company insiders. Comparatively, 1.7% of CarMax shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Lazydays and CarMax’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lazydays	-18.19%	-35.04%	-6.55%
CarMax	1.55%	6.64%	1.48%

Risk & Volatility

Lazydays has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, CarMax has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Lazydays and CarMax, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lazydays	0	2	0	0	2.00
CarMax	2	5	6	0	2.31

Lazydays presently has a consensus price target of $2.00, indicating a potential upside of 33.33%. CarMax has a consensus price target of $76.25, indicating a potential downside of 3.94%. Given Lazydays’ higher probable upside, equities research analysts plainly believe Lazydays is more favorable than CarMax.

Earnings & Valuation

This table compares Lazydays and CarMax’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lazydays	$987.99 million	0.02	-$110.27 million	($9.62)	-0.16
CarMax	$25.96 billion	0.48	$479.20 million	$2.56	31.01

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

Summary

CarMax beats Lazydays on 10 of the 14 factors compared between the two stocks.

About Lazydays

Lazydays Holdings, Inc. operates recreational vehicle (RV) dealerships under the Lazydays name in the United States. The company offers RV sales, RV-repair and services, financing and insurance products, third-party protection plans, and after-market parts and accessories. It also operates the Lazydays RV resort at Tampa, Florida. The company was founded in 1976 and is based in Tampa, Florida.

About CarMax

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.