LendingTree (NASDAQ:TREE – Get Free Report) and PRA Group (NASDAQ:PRAA – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.
Earnings and Valuation
This table compares LendingTree and PRA Group”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LendingTree | $1.12 billion | 0.39 | $151.31 million | $12.90 | 2.43 |
| PRA Group | $1.20 billion | 0.63 | -$305.14 million | ($6.73) | -3.01 |
Risk and Volatility
LendingTree has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and price targets for LendingTree and PRA Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LendingTree | 0 | 2 | 5 | 0 | 2.71 |
| PRA Group | 1 | 2 | 1 | 1 | 2.40 |
LendingTree currently has a consensus price target of $61.33, indicating a potential upside of 95.64%. PRA Group has a consensus price target of $26.00, indicating a potential upside of 28.52%. Given LendingTree’s stronger consensus rating and higher probable upside, equities analysts clearly believe LendingTree is more favorable than PRA Group.
Institutional & Insider Ownership
68.3% of LendingTree shares are held by institutional investors. Comparatively, 97.2% of PRA Group shares are held by institutional investors. 4.0% of LendingTree shares are held by insiders. Comparatively, 2.2% of PRA Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares LendingTree and PRA Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LendingTree | 14.33% | 14.57% | 4.49% |
| PRA Group | -19.91% | 15.56% | 3.18% |
Summary
LendingTree beats PRA Group on 10 of the 15 factors compared between the two stocks.
About LendingTree
LendingTree, Inc., through its subsidiary, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, and home equity loans and lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home, automobile, and health and Medicare through which consumers are matched with insurance lead aggregators to obtain insurance offers and policies. In addition, the company offers QuoteWizard, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is based in Charlotte, North Carolina.
About PRA Group
PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was founded in 1996 and is headquartered in Norfolk, Virginia.
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