Critical Review: Lendingclub (NASDAQ:HAPN) versus ZIP (OTCMKTS:ZIZTF)

ZIP (OTCMKTS:ZIZTF) and Lendingclub (NASDAQ:HAPN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and price targets for ZIP and Lendingclub, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZIP	0	0	1	0	3.00
Lendingclub	0	1	2	0	2.67

Lendingclub has a consensus price target of $25.00, indicating a potential upside of 28.60%. Given Lendingclub’s higher possible upside, analysts clearly believe Lendingclub is more favorable than ZIP.

Profitability

This table compares ZIP and Lendingclub’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZIP	N/A	N/A	N/A
Lendingclub	18.67%	12.92%	1.66%

Valuation and Earnings

This table compares ZIP and Lendingclub”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZIP	N/A	N/A	N/A	N/A	N/A
Lendingclub	$998.85 million	2.25	$135.68 million	$1.66	11.71

Lendingclub has higher revenue and earnings than ZIP.

Institutional and Insider Ownership

74.1% of Lendingclub shares are owned by institutional investors. 3.3% of Lendingclub shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Lendingclub beats ZIP on 8 of the 9 factors compared between the two stocks.

About ZIP

Zip Co Limited engages in the provision of digital retail finance and payments solutions to consumers, and small and medium sized merchants (SMEs) in Australia, New Zealand, Canada, and the United States. The company offers Buy Now Pay Later services, which offer line of credit and installment products to consumers through online and in-store. It also provides unsecured loans and lines of credit to SMEs. The company was formerly known as ZipMoney Limited and changed its name to Zip Co Limited in December 2017. Zip Co Limited was incorporated in 2009 and is headquartered in Sydney, Australia.

About Lendingclub

LendingClub Corporation, operates as a bank holding company for LendingClub Bank, National Association that provides range of financial products and services through a technology-driven platform in the United States. The company provides commercial and industrial, commercial real estate, small business, and equipment loans, as well as leases equipment; and unsecured personal and auto, patient finance, and education finance loans. It also operates an online lending marketplace platform that connects borrowers and investors. LendingClub Corporation was incorporated in 2006 and is headquartered in San Francisco, California.