Credit Acceptance (NASDAQ:CACC – Get Free Report) and Katapult (NASDAQ:KPLT – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.
Profitability
This table compares Credit Acceptance and Katapult’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Credit Acceptance | 21.54% | 31.67% | 5.68% |
| Katapult | 3.60% | -26.41% | 10.86% |
Analyst Ratings
This is a summary of recent ratings and price targets for Credit Acceptance and Katapult, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Credit Acceptance | 0 | 3 | 1 | 0 | 2.25 |
| Katapult | 1 | 0 | 0 | 0 | 1.00 |
Institutional and Insider Ownership
81.7% of Credit Acceptance shares are owned by institutional investors. Comparatively, 26.8% of Katapult shares are owned by institutional investors. 6.1% of Credit Acceptance shares are owned by company insiders. Comparatively, 8.0% of Katapult shares are owned by company 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.
Risk and Volatility
Credit Acceptance has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Katapult has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500.
Valuation and Earnings
This table compares Credit Acceptance and Katapult”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Credit Acceptance | $2.32 billion | 2.47 | $423.90 million | $45.48 | 12.04 |
| Katapult | $291.76 million | 0.08 | $1.37 million | $1.37 | 3.43 |
Credit Acceptance has higher revenue and earnings than Katapult. Katapult is trading at a lower price-to-earnings ratio than Credit Acceptance, indicating that it is currently the more affordable of the two stocks.
Summary
Credit Acceptance beats Katapult on 11 of the 14 factors compared between the two stocks.
About Credit Acceptance
Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company serves independent and franchised automobile dealers. Credit Acceptance Corporation was incorporated in 1972 and is headquartered in Southfield, Michigan.
About Katapult
Katapult Holdings, Inc., an e-commerce focused financial technology company, provides e-commerce point-of-sale lease-purchase options for nonprime consumers in the United States. The company's technology platform provides nonprime consumers with a lease purchase option to enable them to obtain durable goods from its network of e-commerce retailers. It also offers Katapult Pay, a one-time use virtual card technology that makes lease purchasing and transactions. The company was formerly known as Cognical Holdings, Inc. and changed its name to Katapult Holdings, Inc. in February 2020. The company is headquartered in Plano, Texas.
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