Head-To-Head Comparison: PRA Group (NASDAQ:PRAA) and Oportun Financial (NASDAQ:OPRT)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oportun Financial	2.05%	13.55%	1.65%
PRA Group	-19.91%	15.56%	3.18%

Analyst Ratings

This is a summary of current ratings for Oportun Financial and PRA Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oportun Financial	1	2	2	0	2.20
PRA Group	1	2	1	1	2.40

Oportun Financial presently has a consensus price target of $7.33, indicating a potential downside of 4.01%. PRA Group has a consensus price target of $26.00, indicating a potential upside of 28.40%. Given PRA Group’s stronger consensus rating and higher probable upside, analysts plainly believe PRA Group is more favorable than Oportun Financial.

Insider and Institutional Ownership

82.7% of Oportun Financial shares are owned by institutional investors. Comparatively, 97.2% of PRA Group shares are owned by institutional investors. 1.6% of Oportun Financial shares are owned by company insiders. Comparatively, 2.2% of PRA Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Oportun Financial and PRA Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oportun Financial	$956.70 million	0.37	$25.25 million	$0.40	19.10
PRA Group	$1.20 billion	0.63	-$305.14 million	($6.73)	-3.01

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

Risk and Volatility

Oportun Financial has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Summary

PRA Group beats Oportun Financial on 9 of the 15 factors compared between the two stocks.

About Oportun Financial

Oportun Financial Corporation provides financial services. The company offers personal loans and credit cards. It serves customers through online and over the phone, as well as through retail and Lending as a Service partner locations. The company was founded in 2005 and is headquartered in San Carlos, California.

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.