Contrasting Vroom (NASDAQ:VRM) and Atlanticus (NASDAQ:ATLC)

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlanticus	$1.97 billion	0.71	$122.20 million	$7.69	12.06
Vroom	$178.83 million	0.27	-$7.96 million	($11.12)	-0.83

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.

Analyst Ratings

This is a summary of current ratings and target prices for Atlanticus and Vroom, as reported by MarketBeat.

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

Atlanticus currently has a consensus price target of $126.00, indicating a potential upside of 35.82%. Given Atlanticus’ stronger consensus rating and higher probable upside, equities analysts clearly believe Atlanticus is more favorable than Vroom.

Risk and Volatility

Atlanticus has a beta of 2.11, suggesting that its share price is 111% more volatile than the S&P 500. Comparatively, Vroom has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

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

Profitability

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

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

Summary

Atlanticus beats Vroom on 14 of the 15 factors compared between the two stocks.

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.

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.