Analyzing Katapult (NASDAQ:KPLT) & PRA Group (NASDAQ:PRAA)

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

Earnings & Valuation

This table compares PRA Group and Katapult”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	0.66	-$305.14 million	($6.73)	-3.12
Katapult	$291.76 million	0.16	$1.37 million	$1.37	6.93

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

Analyst Recommendations

This is a breakdown of current ratings for PRA Group and Katapult, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	1	2	1	1	2.40
Katapult	1	0	0	0	1.00

PRA Group currently has a consensus target price of $26.00, indicating a potential upside of 23.81%. Given PRA Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe PRA Group is more favorable than Katapult.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PRA Group	-19.91%	15.56%	3.18%
Katapult	3.60%	-26.41%	10.86%

Risk and Volatility

PRA Group has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Katapult has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Insider and Institutional Ownership

97.2% of PRA Group shares are owned by institutional investors. Comparatively, 26.8% of Katapult shares are owned by institutional investors. 2.2% of PRA Group shares are owned by insiders. Comparatively, 8.0% of Katapult 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.

Summary

PRA Group beats Katapult on 8 of the 15 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 Katapult

Katapult Holdings, Inc., an e-commerce focused financial technology company, provides e-commerce point-of-sale lease-purchase options for nonprime consumers in the United States. The company's technology platform provides nonprime consumers with a lease purchase option to enable them to obtain durable goods from its network of e-commerce retailers. It also offers Katapult Pay, a one-time use virtual card technology that makes lease purchasing and transactions. The company was formerly known as Cognical Holdings, Inc. and changed its name to Katapult Holdings, Inc. in February 2020. The company is headquartered in Plano, Texas.