Houlihan Lokey (NYSE:HLI) vs. Oportun Financial (NASDAQ:OPRT) Financial Analysis

Oportun Financial (NASDAQ:OPRT) and Houlihan Lokey (NYSE:HLI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Oportun Financial and Houlihan Lokey”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oportun Financial	$1.00 billion	0.21	-$78.68 million	$0.66	7.08
Houlihan Lokey	$2.57 billion	4.74	$399.71 million	$6.20	28.02

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

Profitability

This table compares Oportun Financial and Houlihan Lokey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oportun Financial	3.19%	17.61%	2.03%
Houlihan Lokey	16.46%	23.75%	14.21%

Insider & Institutional Ownership

82.7% of Oportun Financial shares are owned by institutional investors. Comparatively, 78.1% of Houlihan Lokey shares are owned by institutional investors. 9.3% of Oportun Financial shares are owned by insiders. Comparatively, 22.8% of Houlihan Lokey shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Oportun Financial has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Houlihan Lokey has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Oportun Financial and Houlihan Lokey, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oportun Financial	2	3	2	0	2.00
Houlihan Lokey	0	5	4	1	2.60

Oportun Financial presently has a consensus price target of $8.67, indicating a potential upside of 85.58%. Houlihan Lokey has a consensus price target of $212.43, indicating a potential upside of 22.28%. Given Oportun Financial’s higher possible upside, equities research analysts clearly believe Oportun Financial is more favorable than Houlihan Lokey.

Summary

Houlihan Lokey beats Oportun Financial on 12 of the 15 factors compared between the two stocks.

About Oportun Financial

Oportun Financial Corporation provides financial services. The company offers personal loans and credit cards. It serves customers through online and over the phone, as well as through retail and Lending as a Service partner locations. The company was founded in 2005 and is headquartered in San Carlos, California.

About Houlihan Lokey

Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), capital market, financial restructuring, and financial and valuation advisory services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy-side and sell-side transactions, leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, as well as advise financial sponsors on various transactions. The Financial Restructuring segment advises debtors, creditors, and other parties-in-interest related to recapitalization/deleveraging transactions. It also provides a range of advisory services, including structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The Financial and Valuation Advisory segment offers valuations of various assets, such as companies, illiquid debt and equity securities, and intellectual property. It also provides fairness opinions in connection with M&A and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions. In addition, this segment offers dispute resolution services. It serves corporations, financial sponsors, and government agencies. The company was incorporated in 1972 and is headquartered in Los Angeles, California.