PRA Group (NASDAQ:PRAA) versus SoFi Technologies (NASDAQ:SOFI) Head-To-Head Review

SoFi Technologies (NASDAQ:SOFI) and PRA Group (NASDAQ:PRAA) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Volatility & Risk

SoFi Technologies has a beta of 2.25, suggesting that its stock price is 125% more volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares SoFi Technologies 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
SoFi Technologies	$3.61 billion	5.79	$481.32 million	$0.55	29.47
PRA Group	$1.20 billion	0.40	-$305.14 million	($6.73)	-1.92

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SoFi Technologies	15.60%	6.89%	1.35%
PRA Group	12.06%	14.67%	3.04%

Institutional and Insider Ownership

38.4% of SoFi Technologies shares are held by institutional investors. Comparatively, 97.2% of PRA Group shares are held by institutional investors. 2.5% of SoFi Technologies shares are held by company insiders. Comparatively, 2.2% of PRA Group 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.

Analyst Recommendations

This is a breakdown of current recommendations for SoFi Technologies and PRA Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoFi Technologies	3	10	10	1	2.38
PRA Group	1	3	0	0	1.75

SoFi Technologies currently has a consensus price target of $21.27, suggesting a potential upside of 31.25%. Given SoFi Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe SoFi Technologies is more favorable than PRA Group.

Summary

SoFi Technologies beats PRA Group on 12 of the 15 factors compared between the two stocks.

About SoFi Technologies

SoFi Technologies, Inc. provides various financial services in the United States, Latin America, and Canada. It operates through three segments: Lending, Technology Platform, and Financial Services. The company offers lending and financial services and products that allows its members to borrow, save, spend, invest, and protect money. It offers personal loans, student loans, home loans, and related services. The company also operates Galileo, a technology platform that offers services to financial and non-financial institution; and Technisys, a cloud-native digital and core banking platform with financial services customers. In addition, it provides SoFi Money offers checking and savings accounts, debit cards, and cash management products; and SoFi Invest, a mobile-first investment platform that provides access to trading and advisory solutions, such as investing and robo-advisory. Further, the company offers SoFi Credit Card that provides cash backs on every purchase; Sofi Relay, a personal finance management product that allows to track all of their financial accounts comprising credit score and spending behaviors; SoFi Protect, which offers insurance product; SoFi Travel, an application that manages travel search and booking experience; SoFi At Work provides financial benefits to employees, including student loan payments made on their employees' behalf; Lantern Credit, a financial services marketplace platform for seeking alternative products and provide product comparisons; and other lending as a service that offers pre-qualified borrower referrals and sells loans to third-party partner. The company was founded in 2011 and is based in San Francisco, 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.