Head to Head Analysis: PRA Group (NASDAQ:PRAA) vs. PPDAI Group (NYSE:FINV)

PRA Group (NASDAQ:PRAA) and PPDAI Group (NYSE:FINV) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for PRA Group and PPDAI Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	1	3	1	0	2.00
PPDAI Group	1	1	0	0	1.50

PRA Group currently has a consensus target price of $26.00, indicating a potential upside of 33.40%. PPDAI Group has a consensus target price of $4.10, indicating a potential upside of 44.37%. Given PPDAI Group’s higher probable upside, analysts plainly believe PPDAI Group is more favorable than PRA Group.

Volatility & Risk

PRA Group has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, PPDAI Group has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Valuation & Earnings

This table compares PRA Group and PPDAI Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PRA Group	$1.34 billion	0.55	-$305.14 million	($6.73)	-2.90
PPDAI Group	$1.94 billion	0.36	$363.56 million	$1.06	2.68

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PRA Group	-19.91%	15.56%	3.18%
PPDAI Group	14.49%	12.31%	7.95%

Insider & Institutional Ownership

97.2% of PRA Group shares are held by institutional investors. Comparatively, 31.1% of PPDAI Group shares are held by institutional investors. 2.2% of PRA Group shares are held by company insiders. Comparatively, 44.0% of PPDAI Group shares are held by company 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

PPDAI Group beats PRA Group on 8 of the 14 factors compared between the two stocks.

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.

About PPDAI Group

FinVolution Group operates in the online consumer finance industry. The company operates a fintech platform that is empowered by borrowers with financial institutions. It operates in China and internationally. The company was formerly known as PPDAI Group Inc. and changed its name to FinVolution Group in November 2019. FinVolution Group was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.