Critical Review: Lazydays (NASDAQ:GORV) vs. Sonic Automotive (NYSE:SAH)

Lazydays (NASDAQ:GORV) and Sonic Automotive (NYSE:SAH) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Risk & Volatility

Lazydays has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500. Comparatively, Sonic Automotive has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Valuation & Earnings

This table compares Lazydays and Sonic Automotive’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lazydays	$1.06 billion	0.03	-$110.27 million	($9.62)	-0.24
Sonic Automotive	$14.37 billion	0.14	$178.20 million	$4.88	12.05

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

Institutional and Insider Ownership

89.7% of Lazydays shares are held by institutional investors. Comparatively, 46.9% of Sonic Automotive shares are held by institutional investors. 61.5% of Lazydays shares are held by insiders. Comparatively, 41.0% of Sonic Automotive shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Lazydays and Sonic Automotive, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lazydays	0	0	0	0	N/A
Sonic Automotive	1	0	3	0	2.50

Sonic Automotive has a consensus target price of $58.00, indicating a potential downside of 1.38%. Given Sonic Automotive’s higher possible upside, analysts plainly believe Sonic Automotive is more favorable than Lazydays.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lazydays	-12.48%	-16.47%	-3.86%
Sonic Automotive	1.21%	27.46%	4.64%

Summary

Sonic Automotive beats Lazydays on 10 of the 13 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 Sonic Automotive

Sonic Automotive, Inc. operates as an automotive retailer in the United States. It operates in three segments, Franchised Dealerships, EchoPark, and Powersports. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests. The EchoPark segment sells used cars and light trucks; and arranges finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations. The Powersports Segment sells new and used powersports vehicles, such as motorcycles, and personal watercraft and all-terrain vehicles; and offers finance and insurance services. The company was incorporated in 1997 and is based in Charlotte, North Carolina.