Sonic Automotive (NYSE:SAH – Get Free Report) and ThredUp (NASDAQ:TDUP – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.
Insider and Institutional Ownership
46.9% of Sonic Automotive shares are held by institutional investors. Comparatively, 89.1% of ThredUp shares are held by institutional investors. 43.7% of Sonic Automotive shares are held by company insiders. Comparatively, 23.1% of ThredUp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Sonic Automotive and ThredUp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sonic Automotive | 1.33% | 20.05% | 3.32% |
| ThredUp | -6.89% | -39.12% | -13.81% |
Earnings & Valuation
This table compares Sonic Automotive and ThredUp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sonic Automotive | $15.48 billion | 0.12 | $118.70 million | $6.22 | 9.69 |
| ThredUp | $340.37 million | 0.58 | -$20.21 million | ($0.18) | -8.33 |
Sonic Automotive has higher revenue and earnings than ThredUp. ThredUp is trading at a lower price-to-earnings ratio than Sonic Automotive, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Sonic Automotive and ThredUp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sonic Automotive | 3 | 3 | 4 | 0 | 2.10 |
| ThredUp | 1 | 2 | 3 | 1 | 2.57 |
Sonic Automotive presently has a consensus target price of $81.62, indicating a potential upside of 35.47%. ThredUp has a consensus target price of $4.64, indicating a potential upside of 209.33%. Given ThredUp’s stronger consensus rating and higher probable upside, analysts clearly believe ThredUp is more favorable than Sonic Automotive.
Risk & Volatility
Sonic Automotive has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, ThredUp has a beta of 2.18, indicating that its share price is 118% more volatile than the S&P 500.
Summary
Sonic Automotive beats ThredUp on 9 of the 15 factors compared between the two stocks.
About Sonic Automotive
Sonic Automotive, Inc. is a U.S. automotive retailer that sells new and used vehicles through franchised dealerships and its EchoPark used-vehicle business. Its dealerships represent a range of automotive manufacturers and serve customers in multiple states. The company also provides automotive services, including vehicle maintenance and repair, collision repair, parts sales, and financing and insurance products. EchoPark focuses on the sale of pre-owned vehicles. Founded in 1997 by automotive entrepreneur O. Bruton Smith, Sonic Automotive is headquartered in Charlotte, North Carolina.
About ThredUp
ThredUp, Inc. operates an online resale platform for secondhand clothing, shoes, handbags and accessories. The company offers shoppers a range of pre-owned items from various brands and provides a way for people to resell eligible clothing through its platform. Through its consignment service, ThredUp handles much of the resale process, including receiving and inspecting items, photographing and listing them, and fulfilling purchases. It also works with brands and retailers through resale programs that support the resale of their products.
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