Upstart (NASDAQ:UPST) and Ally Financial (NYSE:ALLY) Head-To-Head Comparison

Upstart (NASDAQ:UPST) and Ally Financial (NYSE:ALLY) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Institutional & Insider Ownership

63.0% of Upstart shares are owned by institutional investors. Comparatively, 88.8% of Ally Financial shares are owned by institutional investors. 17.3% of Upstart shares are owned by insiders. Comparatively, 0.5% of Ally Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Upstart and Ally Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upstart	$1.04 billion	2.28	$53.60 million	$0.49	49.90
Ally Financial	$9.63 billion	1.22	$852.00 million	$4.24	9.09

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

Volatility and Risk

Upstart has a beta of 2.16, suggesting that its share price is 116% more volatile than the S&P 500. Comparatively, Ally Financial has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Upstart and Ally Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upstart	1	8	8	0	2.41
Ally Financial	0	2	14	1	2.94

Upstart presently has a consensus target price of $43.75, indicating a potential upside of 78.94%. Ally Financial has a consensus target price of $53.67, indicating a potential upside of 39.25%. Given Upstart’s higher probable upside, equities analysts clearly believe Upstart is more favorable than Ally Financial.

Profitability

This table compares Upstart and Ally Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upstart	4.84%	7.13%	1.82%
Ally Financial	16.75%	11.75%	0.79%

Summary

Ally Financial beats Upstart on 9 of the 15 factors compared between the two stocks.

About Upstart

Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.

About Ally Financial

Ally Financial Inc., a digital financial-services company, provides various digital financial products and services in the United States, Canada, and Bermuda. The company operates through Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contract, and guaranteed asset protection products; and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory. The Mortgage Finance Operations segment manages consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies; leveraged loans; and commercial real estate product to serve companies in the nursing facilities, senior housing, and medical office buildings. It also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is based in Detroit, Michigan.