It’s natural for investors to be fixated on companies that dominate their industries, but smaller rivals can often offer better value, according to Charles Lemonides, the founder of ValueWorks.

“There’s a winner-take-all fallacy in certain industries,” he told MarketWatch in a recent interview, “and there are opportunities among overlooked upstarts.”

Lemonides, whose firm manages about $400 million through a hedge fund and several strategies for individual investors, suggested looking at ratios of enterprise value (the market capitalization of a company’s stock, plus its debt less its cash) to estimated sales and earnings before interest and taxes, or EBIT:

The valuations are based on consensus sales and EBIT estimates among analysts polled by FactSet. The rightmost column includes projected compound annual growth rates (CAGR) for the six companies’ revenue over the next two calendar years. These all exceed projected revenue CAGR of 8.7% for the S&P 500 and 8.4% for the S&P 500’s consumer discretionary sector.

He used as one example the ride-share category. While there is an advantage to being a more established player in an industry, customary expectations of economies of scale didn’t hold true for Lyft and Uber, he said.

“Lyft has been growing its top line faster than Uber,” Lemonides said. The consensus estimate among analysts polled by FactSet is for Uber’s 2026 revenue to total $57.8 billion, up 55% from $37.3 billion in 2023. But Lyft is expected to post $7.4 billion in revenue for 2026, up 68% from $4.4 billion in 2023.

Lemonides also likes Lyft as more of a “pure play” on the U.S. ride-sharing business than Uber, he said. Lyft operates almost exclusively in the U.S., and nearly all of its revenue comes from ride sharing. Uber reported that 46% of its second-quarter revenue came from outside the U.S., and 48% came from delivery and freight services.

“Lyft also has a cleaner balance sheet with $900 million in total debt versus $23.5 billion for Uber,” Lemonides said.

Maplebear, which does business as Instacart, trades at much lower valuations to sales and EBIT estimates than rival DoorDash. Instacart has traditionally focused on delivering groceries, while DoorDash mainly delivers prepared food from restaurants. Each is branching out into the other’s territory.

Lemonides called DoorDash’s main business “easier” than that of Instacart but also pointed to the latter’s competitive moat. “If you tried to do a grocery business [as] a startup tomorrow, you would have to make a tremendous investment to develop the infrastructure and the people to do it, and then spend a ton on marketing to get a customer base.”

For Rivian, the valuation comparison can only be based on sales estimates, because the company isn’t expected to become profitable over the next two years. Tesla trades at a valuation-to-sales multiple that’s five times as high.

Rivian began delivering its R2 SUV to customers during the second quarter and expects to deliver a total of between 62,000 and 67,000 vehicles this year. The company expects eventually to increase annual production capacity at its plant in Normal, Ill., to 215,000 vehicles, adding potentially another 300,000 in capacity through its plant in Stanton Springs, Ga.

“The case can be made that it will be the most popular car in America,” Lemonides said of the R2. He sees the R2, with a base price of $44,990, as the only serious competitor to Tesla’s Model Y, he said, because other companies’ electric SUVs “aren’t being pushed and aren’t priced right.”

“By the end of the year I would expect a 100,000 [annualized] run rate, and by the end of next year a 250,000 run rate” for Rivian vehicle deliveries, he said. “Their profitability comes when the R2 gets to scale.”