LexinFintech (NASDAQ:LX – Get Free Report) and Encore Capital Group (NASDAQ:ECPG – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.
Profitability
This table compares LexinFintech and Encore Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LexinFintech | 13.28% | 16.11% | 8.09% |
| Encore Capital Group | -2.89% | 25.27% | 4.30% |
Valuation and Earnings
This table compares LexinFintech and Encore Capital Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LexinFintech | $1.95 billion | 0.29 | $150.76 million | $1.42 | 2.32 |
| Encore Capital Group | $1.32 billion | 0.92 | -$139.24 million | ($1.83) | -29.79 |
LexinFintech has higher revenue and earnings than Encore Capital Group. Encore Capital Group is trading at a lower price-to-earnings ratio than LexinFintech, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for LexinFintech and Encore Capital Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LexinFintech | 0 | 2 | 0 | 0 | 2.00 |
| Encore Capital Group | 1 | 0 | 3 | 1 | 2.80 |
LexinFintech currently has a consensus target price of $3.50, indicating a potential upside of 6.06%. Encore Capital Group has a consensus target price of $61.67, indicating a potential upside of 13.11%. Given Encore Capital Group’s stronger consensus rating and higher possible upside, analysts plainly believe Encore Capital Group is more favorable than LexinFintech.
Risk and Volatility
LexinFintech has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.
Summary
Encore Capital Group beats LexinFintech on 7 of the 13 factors compared between the two stocks.
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.
About Encore Capital Group
Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across financial assets worldwide. The company purchases portfolios of defaulted consumer receivables at deep discounts to face value, as well as manages them by working with individuals as they repay their obligations and works toward financial recovery. It is also involved in the provision of early stage collection, business process outsourcing, and contingent collection services. In addition, the company engages in debt servicing and other portfolio management services to credit originator for non-performing loans. Further, it offers credit management services. Encore Capital Group, Inc. was incorporated in 1999 and is headquartered in San Diego, California.
Receive News & Ratings for LexinFintech Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for LexinFintech and related companies with MarketBeat.com's FREE daily email newsletter.
