Critical Contrast: Vroom (NASDAQ:VRM) & LexinFintech (NASDAQ:LX)

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

Institutional & Insider Ownership

25.8% of Vroom shares are held by institutional investors. 2.9% of Vroom shares are held by company insiders. Comparatively, 27.8% of LexinFintech shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Vroom and LexinFintech”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	N/A	N/A	N/A	($11.12)	-0.75
LexinFintech	N/A	N/A	N/A	$0.84	0.78

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
LexinFintech	1	2	0	0	1.67

LexinFintech has a consensus price target of $2.35, indicating a potential upside of 256.66%. Given LexinFintech’s stronger consensus rating and higher probable upside, analysts clearly believe LexinFintech is more favorable than Vroom.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vroom	N/A	N/A	N/A
LexinFintech	N/A	N/A	N/A

Summary

LexinFintech beats Vroom on 4 of the 5 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 LexinFintech

LexinFintech Holdings Ltd., through its subsidiaries, provides online consumer finance services in the People's Republic of China. The company operates Fenqile.com, an online consumption and consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales with installment payment terms; and Le Hua Card, a scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, enhance operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya application, a location-based services shopping experience with buy-now and pay-later options; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.