Atlanticus (NASDAQ:ATLC) and Vroom (NASDAQ:VRM) Head-To-Head Analysis

Vroom (NASDAQ:VRM) and Atlanticus (NASDAQ:ATLC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Volatility & Risk

Vroom has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Atlanticus has a beta of 2.02, meaning that its stock price is 102% more volatile than the S&P 500.

Earnings and Valuation

This table compares Vroom and Atlanticus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	$10.09 million	4.82	-$7.96 million	($11.12)	-0.84
Atlanticus	$1.97 billion	0.69	$122.20 million	$7.69	11.60

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

Profitability

This table compares Vroom and Atlanticus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vroom	-32.38%	-47.65%	-5.59%
Atlanticus	5.80%	25.17%	2.15%

Insider & Institutional Ownership

25.8% of Vroom shares are owned by institutional investors. Comparatively, 14.2% of Atlanticus shares are owned by institutional investors. 2.9% of Vroom shares are owned by company insiders. Comparatively, 51.0% of Atlanticus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Vroom and Atlanticus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
Atlanticus	0	2	5	1	2.88

Atlanticus has a consensus target price of $126.00, indicating a potential upside of 41.19%. Given Atlanticus’ stronger consensus rating and higher possible upside, analysts clearly believe Atlanticus is more favorable than Vroom.

Summary

Atlanticus beats Vroom on 13 of the 15 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 Atlanticus

Atlanticus Holdings Corporation, a financial technology company, provides credit and related financial services and products to customers the United States. It operates in two segments, Credit as a Service, and Auto Finance. The Credit as a Service segment originates a range of consumer loan products, such as private label and general purpose credit cards originated by lenders through various channels, including retail and healthcare, direct mail solicitation, digital marketing, and partnerships with third parties; and offers credit to their customers for the purchase of various goods and services, including consumer electronics, furniture, elective medical procedures, healthcare, and home-improvements by partnering with retailers, healthcare providers, and other service providers. This segment also offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. It also invests in and services portfolios of credit card receivables. The company was founded in 1996 and is headquartered in Atlanta, Georgia.