Katapult (NASDAQ:KPLT) & Bread Financial (NYSE:BFH) Critical Comparison

Katapult (NASDAQ:KPLT) and Bread Financial (NYSE:BFH) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Risk and Volatility

Katapult has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Katapult	3.60%	-25.37%	10.94%
Bread Financial	11.95%	18.42%	2.76%

Analyst Ratings

This is a summary of current recommendations for Katapult and Bread Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Katapult	1	1	0	0	1.50
Bread Financial	1	6	8	0	2.47

Katapult currently has a consensus target price of $10.00, indicating a potential upside of 57.73%. Bread Financial has a consensus target price of $110.58, indicating a potential downside of 1.55%. Given Katapult’s higher possible upside, equities analysts clearly believe Katapult is more favorable than Bread Financial.

Earnings & Valuation

This table compares Katapult and Bread Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Katapult	$291.76 million	0.10	$1.37 million	$1.15	5.51
Bread Financial	$4.70 billion	0.92	$518.00 million	$12.82	8.76

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

Insider and Institutional Ownership

26.8% of Katapult shares are owned by institutional investors. Comparatively, 99.5% of Bread Financial shares are owned by institutional investors. 8.0% of Katapult shares are owned by company insiders. Comparatively, 1.3% of Bread Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Bread Financial beats Katapult on 10 of the 14 factors compared between 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 Bread Financial

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.