Critical Analysis: Argo Blockchain (NASDAQ:ARBK) & PPDAI Group (NYSE:FINV)

Argo Blockchain (NASDAQ:ARBK) and PPDAI Group (NYSE:FINV) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

2.4% of Argo Blockchain shares are held by institutional investors. Comparatively, 31.2% of PPDAI Group shares are held by institutional investors. 44.0% of PPDAI Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Argo Blockchain has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, PPDAI Group has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Earnings & Valuation

This table compares Argo Blockchain and PPDAI Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Argo Blockchain	$24.12 million	1.01	-$55.10 million	($0.97)	-0.35
PPDAI Group	$1.79 billion	1.08	$326.49 million	$1.48	5.14

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

Profitability

This table compares Argo Blockchain and PPDAI Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Argo Blockchain	N/A	N/A	N/A
PPDAI Group	20.28%	18.88%	12.21%

Analyst Ratings

This is a breakdown of current ratings and target prices for Argo Blockchain and PPDAI Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Argo Blockchain	1	1	0	0	1.50
PPDAI Group	0	0	2	0	3.00

PPDAI Group has a consensus target price of $11.55, suggesting a potential upside of 51.69%. Given PPDAI Group’s stronger consensus rating and higher probable upside, analysts plainly believe PPDAI Group is more favorable than Argo Blockchain.

Summary

PPDAI Group beats Argo Blockchain on 13 of the 14 factors compared between the two stocks.

About Argo Blockchain

Argo Blockchain plc, together with its subsidiaries, engages in the bitcoin and other cryptocurrencies mining business worldwide. It engages in mining purpose-built computers for complex cryptographic algorithms. The company was formerly known as GoSun Blockchain Limited and changed its name to Argo Blockchain plc in December 2017. Argo Blockchain plc was incorporated in 2017 and is based in London, the United Kingdom.

About PPDAI Group

FinVolution Group operates in the online consumer finance industry. The company operates a fintech platform that is empowered by borrowers with financial institutions. It operates in China and internationally. The company was formerly known as PPDAI Group Inc. and changed its name to FinVolution Group in November 2019. FinVolution Group was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.