Credit Acceptance (NASDAQ:CACC) and SoFi Technologies (NASDAQ:SOFI) Head to Head Analysis

SoFi Technologies (NASDAQ:SOFI) and Credit Acceptance (NASDAQ:CACC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for SoFi Technologies and Credit Acceptance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoFi Technologies	3	11	10	1	2.36
Credit Acceptance	0	3	1	0	2.25

SoFi Technologies presently has a consensus target price of $21.15, indicating a potential upside of 25.48%. Credit Acceptance has a consensus target price of $565.00, indicating a potential upside of 4.44%. Given SoFi Technologies’ stronger consensus rating and higher possible upside, equities analysts clearly believe SoFi Technologies is more favorable than Credit Acceptance.

Valuation & Earnings

This table compares SoFi Technologies and Credit Acceptance”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoFi Technologies	$4.31 billion	5.06	$619.95 million	$0.48	35.11
Credit Acceptance	$2.31 billion	2.45	$475.72 million	$45.48	11.90

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

Profitability

This table compares SoFi Technologies and Credit Acceptance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoFi Technologies	N/A	N/A	N/A
Credit Acceptance	N/A	N/A	N/A

Institutional and Insider Ownership

38.4% of SoFi Technologies shares are owned by institutional investors. Comparatively, 81.7% of Credit Acceptance shares are owned by institutional investors. 2.5% of SoFi Technologies shares are owned by insiders. Comparatively, 6.1% of Credit Acceptance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

SoFi Technologies has a beta of 2.33, meaning that its share price is 133% more volatile than the S&P 500. Comparatively, Credit Acceptance has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Summary

SoFi Technologies beats Credit Acceptance on 9 of the 12 factors compared between the two stocks.

About SoFi Technologies

SoFi Technologies, Inc. provides various financial services in the United States, Latin America, and Canada. It operates through three segments: Lending, Technology Platform, and Financial Services. The company offers lending and financial services and products that allows its members to borrow, save, spend, invest, and protect money. It offers personal loans, student loans, home loans, and related services. The company also operates Galileo, a technology platform that offers services to financial and non-financial institution; and Technisys, a cloud-native digital and core banking platform with financial services customers. In addition, it provides SoFi Money offers checking and savings accounts, debit cards, and cash management products; and SoFi Invest, a mobile-first investment platform that provides access to trading and advisory solutions, such as investing and robo-advisory. Further, the company offers SoFi Credit Card that provides cash backs on every purchase; Sofi Relay, a personal finance management product that allows to track all of their financial accounts comprising credit score and spending behaviors; SoFi Protect, which offers insurance product; SoFi Travel, an application that manages travel search and booking experience; SoFi At Work provides financial benefits to employees, including student loan payments made on their employees' behalf; Lantern Credit, a financial services marketplace platform for seeking alternative products and provide product comparisons; and other lending as a service that offers pre-qualified borrower referrals and sells loans to third-party partner. The company was founded in 2011 and is based in San Francisco, California.

About Credit Acceptance

Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company serves independent and franchised automobile dealers. Credit Acceptance Corporation was incorporated in 1972 and is headquartered in Southfield, Michigan.