Vroom (NASDAQ:VRM – Get Free Report) and X Financial (NYSE:XYF – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.
Risk and Volatility
Vroom has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, X Financial has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.
Valuation and Earnings
This table compares Vroom and X Financial”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vroom | $178.83 million | 0.27 | -$7.96 million | ($11.12) | -0.83 |
| X Financial | $1.09 billion | 0.18 | $209.43 million | $1.96 | 2.62 |
X Financial has higher revenue and earnings than Vroom. Vroom is trading at a lower price-to-earnings ratio than X Financial, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and price targets for Vroom and X Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vroom | 1 | 0 | 0 | 0 | 1.00 |
| X Financial | 0 | 1 | 0 | 0 | 2.00 |
Profitability
This table compares Vroom and X Financial’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% |
| X Financial | 9.94% | 9.14% | 5.20% |
Institutional and Insider Ownership
25.8% of Vroom shares are owned by institutional investors. Comparatively, 1.1% of X Financial shares are owned by institutional investors. 2.9% of Vroom shares are owned by insiders. Comparatively, 31.6% of X Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
X Financial beats Vroom on 9 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 X Financial
X Financial provides personal finance services in the People’s Republic of China. The company offers services as an online marketplace connecting borrowers and investors or institutional funding partners. Its loan products include Xiaoying credit loan, which consists of Xiaoying card loan; and Xiaoying preferred loan to small business owners. The company also offers Xiaoying housing loan, a home equity loan product for property owners; investment products through Xiaoying wealth management platform, such as funds, money market, and insurance products; and loan facilitation services to other platforms. In addition, it engages in the technology development, service, and sale of products; and provision of guarantee and consulting services. The company was incorporated in 2014 and is headquartered in Shenzhen, the People’s Republic of China.
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