Comparing Oportun Financial (NASDAQ:OPRT) and PRA Group (NASDAQ:PRAA)

PRA Group (NASDAQ:PRAA) and Oportun Financial (NASDAQ:OPRT) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Volatility and Risk

PRA Group has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Oportun Financial has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Valuation and Earnings

This table compares PRA Group and Oportun Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PRA Group	$1.20 billion	0.40	-$305.14 million	($6.73)	-1.92
Oportun Financial	$956.70 million	0.54	$25.25 million	$0.74	15.28

Oportun Financial has lower revenue, but higher earnings than PRA Group. PRA Group is trading at a lower price-to-earnings ratio than Oportun Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PRA Group and Oportun Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PRA Group	12.06%	14.67%	3.04%
Oportun Financial	3.88%	14.67%	1.87%

Insider & Institutional Ownership

97.2% of PRA Group shares are owned by institutional investors. Comparatively, 82.7% of Oportun Financial shares are owned by institutional investors. 2.2% of PRA Group shares are owned by company insiders. Comparatively, 1.6% of Oportun Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for PRA Group and Oportun Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	1	3	0	0	1.75
Oportun Financial	0	3	2	0	2.40

Oportun Financial has a consensus target price of $9.25, indicating a potential downside of 18.21%. Given Oportun Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Oportun Financial is more favorable than PRA Group.

Summary

Oportun Financial beats PRA Group on 8 of the 13 factors compared between the two stocks.

About PRA Group

PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was founded in 1996 and is headquartered in Norfolk, Virginia.

About Oportun Financial

Oportun Financial Corporation provides financial services. The company offers personal loans and credit cards. It serves customers through online and over the phone, as well as through retail and Lending as a Service partner locations. The company was founded in 2005 and is headquartered in San Carlos, California.