Contrasting Fox Factory (NASDAQ:FOXF) and Goodyear Tire & Rubber (NASDAQ:GT)

Goodyear Tire & Rubber (NASDAQ:GT) and Fox Factory (NASDAQ:FOXF) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Volatility & Risk

Goodyear Tire & Rubber has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Fox Factory has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Profitability

This table compares Goodyear Tire & Rubber and Fox Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goodyear Tire & Rubber	-14.37%	-2.95%	-0.50%
Fox Factory	-20.39%	5.57%	2.37%

Institutional and Insider Ownership

84.2% of Goodyear Tire & Rubber shares are held by institutional investors. 0.5% of Goodyear Tire & Rubber shares are held by insiders. Comparatively, 0.9% of Fox Factory shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Goodyear Tire & Rubber and Fox Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goodyear Tire & Rubber	3	2	2	0	1.86
Fox Factory	2	3	1	1	2.14

Goodyear Tire & Rubber currently has a consensus price target of $8.06, indicating a potential upside of 84.23%. Fox Factory has a consensus price target of $19.60, indicating a potential upside of 20.65%. Given Goodyear Tire & Rubber’s higher possible upside, equities analysts clearly believe Goodyear Tire & Rubber is more favorable than Fox Factory.

Earnings & Valuation

This table compares Goodyear Tire & Rubber and Fox Factory”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goodyear Tire & Rubber	$18.28 billion	0.07	-$1.72 billion	($8.83)	-0.50
Fox Factory	$1.46 billion	0.47	-$544.58 million	($7.14)	-2.28

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

Summary

Fox Factory beats Goodyear Tire & Rubber on 9 of the 15 factors compared between the two stocks.

About Goodyear Tire & Rubber

Goodyear Tire & Rubber Co. engages in the development, manufacture, distribution, and sale of tires. It operates through the following geographical segments: Americas, Europe, Middle East, and Africa, and Asia Pacific. The Americas segment is involved in the development, manufacture, distribution, and sale of tires and related products and services in North, Central, and South America. The Europe, Middle East, and Africa segment focuses on the development, manufacture, distribution, and sale of tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving, mining, and industrial equipment throughout Europe, the Middle East, and Africa. The Asia Pacific segment refers to the development, manufacture, distribution, and sales of tires for automobiles, trucks, buses, aircraft, farm, earthmoving, mining, and industrial equipment throughout the Asia Pacific region. The company was founded by Frank A. Seiberling on August 29, 1898 and is headquartered in Akron, OH.

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.