Upstart (NASDAQ:UPST) & Virtu Financial (NASDAQ:VIRT) Critical Contrast

Virtu Financial (NASDAQ:VIRT) and Upstart (NASDAQ:UPST) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Profitability

This table compares Virtu Financial and Upstart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Virtu Financial	10.43%	32.08%	3.09%
Upstart	5.13%	6.30%	1.74%

Risk and Volatility

Virtu Financial has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Upstart has a beta of 2.44, suggesting that its share price is 144% more volatile than the S&P 500.

Institutional & Insider Ownership

45.8% of Virtu Financial shares are held by institutional investors. Comparatively, 63.0% of Upstart shares are held by institutional investors. 47.2% of Virtu Financial shares are held by company insiders. Comparatively, 16.7% of Upstart shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Virtu Financial and Upstart”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virtu Financial	$3.63 billion	1.79	$276.42 million	$5.13	8.18
Upstart	$1.04 billion	2.62	$53.60 million	$0.42	66.48

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Virtu Financial and Upstart, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virtu Financial	1	4	2	0	2.14
Upstart	4	7	4	0	2.00

Virtu Financial currently has a consensus price target of $43.00, suggesting a potential upside of 2.42%. Upstart has a consensus price target of $48.17, suggesting a potential upside of 72.52%. Given Upstart’s higher probable upside, analysts clearly believe Upstart is more favorable than Virtu Financial.

Summary

Virtu Financial beats Upstart on 8 of the 14 factors compared between the two stocks.

About Virtu Financial

Virtu Financial, Inc. operates as a financial services company in the United States, Asia Pacific, Canada, EMEA, Ireland, and internationally. The company operates through two segments, Market Making and Execution Services. Its product includes offerings in execution, liquidity sourcing, analytics and broker-neutral, capital markets, and multi-dealer platforms in workflow technology. The company's product allow its clients to trade on various venues across 50 countries and in various asset classes, including global equities, ETFs, options, foreign exchange, futures, fixed income, cryptocurrencies, and myriad other commodities. Its multi-asset analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across global markets. The company was founded in 2008 and is headquartered in New York, New York.

About Upstart

Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.