Comparing Lendingclub (NASDAQ:HAPN) & Vroom (NASDAQ:VRM)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vroom	-32.38%	-47.65%	-5.59%
Lendingclub	18.67%	12.92%	1.66%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	$178.83 million	0.29	-$7.96 million	($11.12)	-0.90
Lendingclub	$998.85 million	1.94	$135.68 million	$1.66	10.12

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
Lendingclub	0	1	2	0	2.67

Lendingclub has a consensus target price of $25.00, indicating a potential upside of 48.81%. Given Lendingclub’s stronger consensus rating and higher possible upside, analysts plainly believe Lendingclub is more favorable than Vroom.

Volatility & Risk

Vroom has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Lendingclub has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500.

Institutional and Insider Ownership

25.8% of Vroom shares are held by institutional investors. Comparatively, 74.1% of Lendingclub shares are held by institutional investors. 2.9% of Vroom shares are held by company insiders. Comparatively, 3.3% of Lendingclub shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Lendingclub beats Vroom on 14 of the 14 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 Lendingclub

LendingClub Corporation, operates as a bank holding company for LendingClub Bank, National Association that provides range of financial products and services through a technology-driven platform in the United States. The company provides commercial and industrial, commercial real estate, small business, and equipment loans, as well as leases equipment; and unsecured personal and auto, patient finance, and education finance loans. It also operates an online lending marketplace platform that connects borrowers and investors. LendingClub Corporation was incorporated in 2006 and is headquartered in San Francisco, California.