Vroom (NASDAQ:VRM) vs. FirstCash (NASDAQ:FCFS) Financial Analysis

Vroom (NASDAQ:VRM) and FirstCash (NASDAQ:FCFS) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Volatility and Risk

Vroom has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, FirstCash has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500.

Earnings & Valuation

This table compares Vroom and FirstCash”s gross 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
FirstCash	$3.66 billion	2.60	$330.38 million	$8.76	25.02

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

Profitability

This table compares Vroom and FirstCash’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%
FirstCash	9.42%	19.65%	8.38%

Insider and Institutional Ownership

25.8% of Vroom shares are owned by institutional investors. Comparatively, 80.3% of FirstCash shares are owned by institutional investors. 2.9% of Vroom shares are owned by company insiders. Comparatively, 2.9% of FirstCash shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Vroom and FirstCash, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
FirstCash	0	1	4	0	2.80

FirstCash has a consensus price target of $249.00, indicating a potential upside of 13.59%. Given FirstCash’s stronger consensus rating and higher probable upside, analysts clearly believe FirstCash is more favorable than Vroom.

Summary

FirstCash beats Vroom on 12 of the 14 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 FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.