Vroom (NASDAQ:VRM – Get Free Report) and World Acceptance (NASDAQ:WRLD – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.
Insider & Institutional Ownership
25.8% of Vroom shares are held by institutional investors. Comparatively, 83.6% of World Acceptance shares are held by institutional investors. 2.9% of Vroom shares are held by company insiders. Comparatively, 38.0% of World Acceptance shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings for Vroom and World Acceptance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vroom | 1 | 0 | 0 | 0 | 1.00 |
| World Acceptance | 0 | 2 | 0 | 0 | 2.00 |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vroom | $178.83 million | 0.27 | -$7.96 million | ($11.12) | -0.84 |
| World Acceptance | $585.74 million | 1.43 | $34.59 million | $8.46 | 21.31 |
World Acceptance has higher revenue and earnings than Vroom. Vroom is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Vroom and World Acceptance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vroom | -32.38% | -47.65% | -5.59% |
| World Acceptance | 6.71% | 12.13% | 4.00% |
Risk and Volatility
Vroom has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.
Summary
World Acceptance beats Vroom on 11 of the 12 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 World Acceptance
World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.
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