Critical Comparison: Carvana (NYSE:CVNA) & Destination XL Group (NASDAQ:DXLG)
by Mitch Edgeman · The Markets DailyCarvana (NYSE:CVNA – Get Free Report) and Destination XL Group (NASDAQ:DXLG – Get Free Report) 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, dividends, risk, earnings, analyst recommendations, valuation and profitability.
Analyst Ratings
This is a breakdown of recent recommendations for Carvana and Destination XL Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Carvana | 0 | 8 | 16 | 1 | 2.72 |
| Destination XL Group | 1 | 0 | 1 | 0 | 2.00 |
Carvana currently has a consensus target price of $83.13, indicating a potential upside of 43.34%. Destination XL Group has a consensus target price of $1.25, indicating a potential upside of 188.55%. Given Destination XL Group’s higher possible upside, analysts clearly believe Destination XL Group is more favorable than Carvana.
Earnings & Valuation
This table compares Carvana and Destination XL Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Carvana | $20.32 billion | 3.14 | $1.41 billion | $1.81 | 32.04 |
| Destination XL Group | $435.02 million | 0.06 | -$35.91 million | ($0.69) | -0.63 |
Carvana has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Carvana, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Carvana has a beta of 3.55, indicating that its share price is 255% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.
Institutional and Insider Ownership
56.7% of Carvana shares are owned by institutional investors. Comparatively, 73.5% of Destination XL Group shares are owned by institutional investors. 15.2% of Carvana shares are owned by company insiders. Comparatively, 14.3% of Destination XL Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Carvana and Destination XL Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Carvana | 6.26% | 37.06% | 12.21% |
| Destination XL Group | -8.77% | -9.05% | -2.75% |
Summary
Carvana beats Destination XL Group 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 Destination XL Group
Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men’s clothing and shoes in the United States. The company’s stores offer sportswear and dresswear; fashion-neutral items, including jeans, casual pants, T-shirts, polo shirts, dress shirts, and suit separates; and casual clothing. It also provides vintage-screen T-shirts and wovens under various private labels. The company offers its products under the trade names of Destination XL, DXL, DXL Men’s Apparel, DXL outlets, Casual Male XL, and Casual Male XL outlets. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was incorporated in 1976 and is headquartered in Canton, Massachusetts.