Analyzing Katapult (NASDAQ:KPLT) and FirstCash (NASDAQ:FCFS)

FirstCash (NASDAQ:FCFS) and Katapult (NASDAQ:KPLT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Earnings & Valuation

This table compares FirstCash and Katapult”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstCash	$3.66 billion	2.20	$330.38 million	$9.23	20.35
Katapult	$291.76 million	0.20	$1.37 million	$1.37	8.57

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

Risk & Volatility

FirstCash has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Katapult has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500.

Profitability

This table compares FirstCash and Katapult’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstCash	9.48%	20.17%	8.52%
Katapult	3.60%	-26.41%	10.86%

Analyst Ratings

This is a breakdown of current recommendations and price targets for FirstCash and Katapult, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstCash	0	1	5	0	2.83
Katapult	1	0	0	0	1.00

FirstCash currently has a consensus target price of $247.50, indicating a potential upside of 31.77%. Given FirstCash’s stronger consensus rating and higher possible upside, research analysts clearly believe FirstCash is more favorable than Katapult.

Insider & Institutional Ownership

80.3% of FirstCash shares are held by institutional investors. Comparatively, 26.8% of Katapult shares are held by institutional investors. 2.9% of FirstCash shares are held by insiders. Comparatively, 8.0% of Katapult shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

FirstCash beats Katapult on 11 of the 14 factors compared between the two stocks.

About FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.

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.