Financial Survey: Fox Factory (NASDAQ:FOXF) versus Vroom (NASDAQ:VRM)

Vroom (NASDAQ:VRM) and Fox Factory (NASDAQ:FOXF) are both small-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Profitability

This table compares Vroom and Fox Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vroom	-37.16%	-51.07%	-6.63%
Fox Factory	-20.25%	5.20%	2.32%

Risk and Volatility

Vroom has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Fox Factory has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Insider and Institutional Ownership

25.8% of Vroom shares are held by institutional investors. 2.9% of Vroom shares are held by insiders. Comparatively, 0.9% of Fox Factory shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Vroom and Fox Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
Fox Factory	2	3	2	1	2.25

Fox Factory has a consensus target price of $23.20, suggesting a potential upside of 40.52%. Given Fox Factory’s stronger consensus rating and higher possible upside, analysts plainly believe Fox Factory is more favorable than Vroom.

Valuation & Earnings

This table compares Vroom and Fox Factory”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	$178.83 million	0.24	-$7.96 million	($12.76)	-0.65
Fox Factory	$1.47 billion	0.47	-$544.58 million	($7.17)	-2.30

Vroom has higher earnings, but lower revenue than Fox Factory. Fox Factory is trading at a lower price-to-earnings ratio than Vroom, indicating that it is currently the more affordable of the two stocks.

Summary

Fox Factory beats Vroom on 11 of the 15 factors compared between the two stocks.

About Vroom

Vroom, Inc. operates as an automotive finance company. The company offers vehicle financing to its customers through third party dealers under the UACC brand. It also provides artificial intelligence powered analytics and digital services to dealers, automotive financial services companies, and others in the automotive industry for automotive retail. The company was formerly known as Auto America, Inc. and changed its name to Vroom, Inc. in July 2015. Vroom, Inc. was incorporated in 2012 and is based in Houston, Texas.

About Fox Factory

Fox Factory Holding Corp. designs, engineers, manufactures, and markets performance-defining products and system worldwide. The company offers powered vehicle products for side-by-side vehicles, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles, snowmobiles, and specialty vehicles and applications, such as military, motorcycles, and commercial trucks; lift kits and components with shock products and aftermarket accessory packages for trucks; and mid-end and high-end front fork and rear suspension products. It also provides suspension tuning services, as well as wheels, off-road tires and accessories. In addition, the company offers mountain and gravel bike wheels, and other performance cycling components, including cranks, chainrings, pedals, bars, stems, and seat posts, as well as baseball and softball products comprising metal bats, wood bats, apparel and accessories, batting gloves, fielding gloves, and bags and protective equipment under the Marucci brand. The company serves aftermarket applications products under the BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4×4 Posi-Lok, Ridetech, Tuscany, Outside Van, SCA, and Custom Wheel House brands; and mountain bikes, e-bikes, and gravel bikes under the FOX, Race Face, Easton Cycling, and Marzocchi brands. Fox Factory Holding Corp. was incorporated in 2007 and is based in Duluth, Georgia.