Critical Review: Katapult (NASDAQ:KPLT) vs. Bread Financial (NYSE:BFH)

Bread Financial (NYSE:BFH) and Katapult (NASDAQ:KPLT) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Profitability

This table compares Bread Financial and Katapult’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bread Financial	11.95%	18.42%	2.76%
Katapult	3.60%	-26.41%	10.86%

Insider & Institutional Ownership

99.5% of Bread Financial shares are held by institutional investors. Comparatively, 26.8% of Katapult shares are held by institutional investors. 1.3% of Bread Financial shares are held by company insiders. Comparatively, 8.0% of Katapult shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Bread Financial has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Katapult has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bread Financial and Katapult, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bread Financial	1	6	8	0	2.47
Katapult	1	1	0	0	1.50

Bread Financial presently has a consensus price target of $110.58, suggesting a potential upside of 2.18%. Katapult has a consensus price target of $10.00, suggesting a potential upside of 49.93%. Given Katapult’s higher probable upside, analysts plainly believe Katapult is more favorable than Bread Financial.

Valuation & Earnings

This table compares Bread Financial and Katapult”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bread Financial	$4.70 billion	0.88	$518.00 million	$12.82	8.44
Katapult	$291.76 million	0.11	$1.37 million	$1.37	4.87

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

Summary

Bread Financial beats Katapult on 10 of the 14 factors compared between the two stocks.

About Bread Financial

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.

About Katapult

Katapult Holdings, Inc., an e-commerce focused financial technology company, provides e-commerce point-of-sale lease-purchase options for nonprime consumers in the United States. The company's technology platform provides nonprime consumers with a lease purchase option to enable them to obtain durable goods from its network of e-commerce retailers. It also offers Katapult Pay, a one-time use virtual card technology that makes lease purchasing and transactions. The company was formerly known as Cognical Holdings, Inc. and changed its name to Katapult Holdings, Inc. in February 2020. The company is headquartered in Plano, Texas.