Analyzing PRA Group (NASDAQ:PRAA) and Katapult (NASDAQ:KPLT)

PRA Group (NASDAQ:PRAA) and Katapult (NASDAQ:KPLT) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for PRA Group and Katapult, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	1	2	1	1	2.40
Katapult	1	0	0	0	1.00

PRA Group currently has a consensus target price of $26.00, indicating a potential upside of 23.81%. Given PRA Group’s stronger consensus rating and higher possible upside, analysts plainly believe PRA Group is more favorable than Katapult.

Risk and Volatility

PRA Group has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Katapult has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Institutional & Insider Ownership

97.2% of PRA Group shares are held by institutional investors. Comparatively, 26.8% of Katapult shares are held by institutional investors. 2.2% of PRA Group shares are held by company insiders. Comparatively, 8.0% of Katapult shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares PRA Group and Katapult’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PRA Group	-19.91%	15.56%	3.18%
Katapult	3.60%	-26.41%	10.86%

Valuation and Earnings

This table compares PRA Group and Katapult”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PRA Group	$1.20 billion	0.66	-$305.14 million	($6.73)	-3.12
Katapult	$291.76 million	0.16	$1.37 million	$1.37	6.93

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

Summary

PRA Group beats Katapult on 8 of the 15 factors compared between the two stocks.

About PRA Group

PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was founded in 1996 and is headquartered in Norfolk, Virginia.

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.