World Acceptance (NASDAQ:WRLD) and Vroom (NASDAQ:VRM) Critical Survey

Vroom (NASDAQ:VRM) and World Acceptance (NASDAQ:WRLD) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vroom	-32.38%	-47.65%	-5.59%
World Acceptance	6.71%	12.13%	4.00%

Analyst Ratings

This is a breakdown of current recommendations for Vroom and World Acceptance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
World Acceptance	0	2	0	0	2.00

Volatility & Risk

Vroom has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Insider and Institutional Ownership

25.8% of Vroom shares are held by institutional investors. Comparatively, 83.6% of World Acceptance shares are held by institutional investors. 2.9% of Vroom shares are held by company insiders. Comparatively, 38.0% of World Acceptance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	$178.83 million	0.32	-$7.96 million	($11.12)	-0.97
World Acceptance	$585.74 million	1.52	$34.59 million	$8.46	22.52

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

Summary

World Acceptance beats Vroom on 11 of the 12 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 World Acceptance

World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.