World Acceptance (NASDAQ:WRLD – Get Free Report) and LexinFintech (NASDAQ:LX – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.
Profitability
This table compares World Acceptance and LexinFintech’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| World Acceptance | 14.29% | 18.95% | 7.74% |
| LexinFintech | 11.50% | 14.67% | 7.17% |
Earnings and Valuation
This table compares World Acceptance and LexinFintech”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| World Acceptance | $564.84 million | 1.58 | $89.74 million | $14.82 | 11.08 |
| LexinFintech | $1.95 billion | 0.57 | $150.76 million | $1.27 | 5.17 |
LexinFintech has higher revenue and earnings than World Acceptance. LexinFintech is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
83.6% of World Acceptance shares are owned by institutional investors. 41.6% of World Acceptance shares are owned by insiders. Comparatively, 27.8% of LexinFintech shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent ratings and recommmendations for World Acceptance and LexinFintech, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| World Acceptance | 0 | 1 | 0 | 0 | 2.00 |
| LexinFintech | 0 | 0 | 2 | 0 | 3.00 |
World Acceptance presently has a consensus price target of $10.00, indicating a potential downside of 93.91%. LexinFintech has a consensus price target of $13.60, indicating a potential upside of 107.32%. Given LexinFintech’s stronger consensus rating and higher possible upside, analysts clearly believe LexinFintech is more favorable than World Acceptance.
Risk & Volatility
World Acceptance has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, LexinFintech has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.
Summary
World Acceptance beats LexinFintech on 9 of the 14 factors compared between the two stocks.
About World Acceptance
World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.
About LexinFintech
LexinFintech Holdings Ltd., through its subsidiaries, provides online consumer finance services in the People's Republic of China. The company operates Fenqile.com, an online consumption and consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales with installment payment terms; and Le Hua Card, a scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, enhance operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya application, a location-based services shopping experience with buy-now and pay-later options; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.
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