PPDAI Group (NYSE:FINV) vs. Upstart (NASDAQ:UPST) Critical Contrast

Upstart (NASDAQ:UPST) and PPDAI Group (NYSE:FINV) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Volatility & Risk

Upstart has a beta of 2.26, suggesting that its stock price is 126% more volatile than the S&P 500. Comparatively, PPDAI Group has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Earnings & Valuation

This table compares Upstart and PPDAI Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upstart	$1.04 billion	2.53	$53.60 million	$0.38	72.61
PPDAI Group	$1.94 billion	0.59	$363.56 million	$1.19	3.97

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

Institutional & Insider Ownership

63.0% of Upstart shares are owned by institutional investors. Comparatively, 31.1% of PPDAI Group shares are owned by institutional investors. 17.3% of Upstart shares are owned by company insiders. Comparatively, 44.0% of PPDAI Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Upstart	4.34%	5.63%	1.49%
PPDAI Group	16.58%	14.22%	9.15%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Upstart and PPDAI Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upstart	2	7	8	0	2.35
PPDAI Group	0	1	0	0	2.00

Upstart currently has a consensus target price of $43.93, indicating a potential upside of 59.24%. Given Upstart’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Upstart is more favorable than PPDAI Group.

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.

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.