Head-To-Head Review: Qfin (NASDAQ:QFIN) vs. Vroom (NASDAQ:VRM)

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

Insider and Institutional Ownership

25.8% of Vroom shares are owned by institutional investors. Comparatively, 74.8% of Qfin shares are owned by institutional investors. 2.9% of Vroom shares are owned by insiders. Comparatively, 17.1% of Qfin shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Vroom has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Qfin has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
Qfin	3	4	1	0	1.75

Qfin has a consensus price target of $12.29, indicating a potential upside of 31.43%. Given Qfin’s stronger consensus rating and higher possible upside, analysts clearly believe Qfin is more favorable than Vroom.

Earnings & Valuation

This table compares Vroom and Qfin”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	0.28	-$7.96 million	($11.12)	-0.85
Qfin	$2.75 billion	0.41	$856.52 million	$5.46	1.71

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

Profitability

This table compares Vroom and Qfin’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%
Qfin	27.48%	20.85%	8.71%

Summary

Qfin beats Vroom on 13 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 Qfin

Qifu Technology, Inc., through its subsidiaries, operates credit-tech platform under the 360 Jietiao brand in the People's Republic of China. It provides credit-driven services that matches borrowers with financial institutions to conduct customer acquisition, initial and credit screening, advanced risk assessment, credit assessment, fund matching, and other post-facilitation services; and platform services, including loan facilitation and post-facilitation services to financial institution partners under intelligence credit engine, referral services, and risk management software-as-a-service. The company also offers e-commerce loans, enterprise loans, and invoice loans to SME owners. It serves financial institutions, consumers, and small- and micro-enterprises. The company was formerly known as 360 DigiTech, Inc. and changed its name to Qifu Technology, Inc. in March 2023. The company was founded in 2016 and is headquartered in Shanghai, the People's Republic of China.