Analyzing Vroom (NASDAQ:VRM) and Qfin (NASDAQ:QFIN)

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

Valuation & Earnings

This table compares Qfin and Vroom”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Qfin	$13.27 billion	0.08	$856.52 million	$4.16	2.05
Vroom	$10.09 million	4.89	-$7.96 million	($11.12)	-0.85

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

Analyst Ratings

This is a summary of recent ratings for Qfin and Vroom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Qfin	4	3	1	0	1.62
Vroom	1	0	0	0	1.00

Qfin presently has a consensus price target of $12.29, suggesting a potential upside of 44.14%. Given Qfin’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Qfin is more favorable than Vroom.

Institutional and Insider Ownership

74.8% of Qfin shares are held by institutional investors. Comparatively, 25.8% of Vroom shares are held by institutional investors. 17.1% of Qfin shares are held by insiders. Comparatively, 2.9% of Vroom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Qfin has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Vroom has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Qfin	22.23%	15.23%	6.60%
Vroom	-32.38%	-47.65%	-5.59%

Summary

Qfin beats Vroom on 12 of the 14 factors compared between the two stocks.

About Qfin

Qifu Technology, Inc., through its subsidiaries, operates credit-tech platform under the 360 Jietiao brand in the People's Republic of China. It provides credit-driven services that matches borrowers with financial institutions to conduct customer acquisition, initial and credit screening, advanced risk assessment, credit assessment, fund matching, and other post-facilitation services; and platform services, including loan facilitation and post-facilitation services to financial institution partners under intelligence credit engine, referral services, and risk management software-as-a-service. The company also offers e-commerce loans, enterprise loans, and invoice loans to SME owners. It serves financial institutions, consumers, and small- and micro-enterprises. The company was formerly known as 360 DigiTech, Inc. and changed its name to Qifu Technology, Inc. in March 2023. The company was founded in 2016 and is headquartered in Shanghai, the People's Republic of China.

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.