Financial Analysis: Green Dot (NYSE:GDOT) vs. Katapult (NASDAQ:KPLT)

Katapult (NASDAQ:KPLT) and Green Dot (NYSE:GDOT) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Institutional and Insider Ownership

26.8% of Katapult shares are owned by institutional investors. Comparatively, 92.6% of Green Dot shares are owned by institutional investors. 8.0% of Katapult shares are owned by company insiders. Comparatively, 1.4% of Green Dot shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Katapult has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Katapult and Green Dot, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Katapult	1	0	0	0	1.00
Green Dot	2	2	1	0	1.80

Green Dot has a consensus target price of $16.12, suggesting a potential upside of 20.52%. Given Green Dot’s stronger consensus rating and higher possible upside, analysts clearly believe Green Dot is more favorable than Katapult.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Katapult	3.60%	-26.41%	10.86%
Green Dot	-1.14%	6.92%	1.04%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Katapult	$291.76 million	0.13	$1.37 million	$1.37	5.77
Green Dot	$2.27 billion	0.34	-$98.87 million	($0.51)	-26.24

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

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.

About Green Dot

Green Dot Corporation, a financial technology and registered bank holding company, provides various financial services to consumers and businesses in the United States. It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services. The company provides deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs. It offers money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager. In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients. Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.