Cango (NYSE:CANG) & Blend Labs (NYSE:BLND) Critical Analysis

Blend Labs (NYSE:BLND) and Cango (NYSE:CANG) are both small-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Risk and Volatility

Blend Labs has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Cango has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Blend Labs and Cango’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blend Labs	0.32%	N/A	-3.01%
Cango	-125.53%	-105.01%	-51.46%

Insider and Institutional Ownership

52.6% of Blend Labs shares are owned by institutional investors. Comparatively, 4.2% of Cango shares are owned by institutional investors. 40.3% of Blend Labs shares are owned by company insiders. Comparatively, 29.1% of Cango shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Blend Labs and Cango, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blend Labs	2	2	4	0	2.25
Cango	1	1	1	1	2.50

Blend Labs currently has a consensus price target of $2.82, indicating a potential upside of 84.70%. Cango has a consensus price target of $30.00, indicating a potential upside of 1,324.50%. Given Cango’s stronger consensus rating and higher probable upside, analysts clearly believe Cango is more favorable than Blend Labs.

Valuation & Earnings

This table compares Blend Labs and Cango”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blend Labs	$123.51 million	2.99	-$6.80 million	($0.09)	-16.94
Cango	$688.08 million	0.05	-$621.95 million	($35.60)	-0.06

Blend Labs has higher earnings, but lower revenue than Cango. Blend Labs is trading at a lower price-to-earnings ratio than Cango, indicating that it is currently the more affordable of the two stocks.

Summary

Blend Labs beats Cango on 9 of the 15 factors compared between the two stocks.

About Blend Labs

Blend Labs, Inc. engages in the provision of cloud-based software platform solutions for financial services firms in the United States. It operates in two segments, Blend Platform and Title365. The company's Blend Builder Platform offers a suite of products that powers digital-first consumer journeys for mortgages, home equity loans and lines of credit, vehicle loans, personal loans, credit cards, and deposit accounts; and offers mortgage products to facilitate the homeownership journey for consumers comprising close, income verification for mortgage, homeowners' insurance, and realty. It also offers verification components to automate confirmation tasks that are needed to underwrite a loan or approve the opening of a new deposit account; decisioning components to reduce the need for human intervention by automatically applying business rules throughout an application workflow configured by a financial services firm; workflow intelligence components to manage data collection and automate tasks throughout the loan origination process; and marketplace components to enable consumers to shop for products and services presented at the precise moment of need during an application for a loan. In addition, the company, through its subsidiary, offers title search procedures for title insurance policies, escrow, and other closing and settlement services, as well as other trustee services; and provides professional and consulting services. It serves banks, credit unions, fintechs, and non-bank mortgage lenders. The company was incorporated in 2012 and is headquartered in San Francisco, California.

About Cango

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.