Katapult (NASDAQ:KPLT – Get Free Report) and Encore Capital Group (NASDAQ:ECPG – Get Free Report) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.
Profitability
This table compares Katapult and Encore Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Katapult | 3.60% | -26.41% | 10.86% |
| Encore Capital Group | 15.86% | 29.83% | 5.58% |
Earnings and Valuation
This table compares Katapult and Encore Capital Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Katapult | $291.76 million | 0.09 | $1.37 million | $1.37 | 3.97 |
| Encore Capital Group | $1.77 billion | 1.14 | $256.83 million | $13.21 | 7.22 |
Encore Capital Group has higher revenue and earnings than Katapult. Katapult is trading at a lower price-to-earnings ratio than Encore Capital Group, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and price targets for Katapult and Encore Capital Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Katapult | 1 | 0 | 0 | 0 | 1.00 |
| Encore Capital Group | 0 | 0 | 5 | 1 | 3.17 |
Encore Capital Group has a consensus price target of $89.75, indicating a potential downside of 5.94%. Given Encore Capital Group’s stronger consensus rating and higher possible upside, analysts clearly believe Encore Capital Group is more favorable than Katapult.
Risk and Volatility
Katapult has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.
Institutional and Insider Ownership
26.8% of Katapult shares are owned by institutional investors. 8.0% of Katapult shares are owned by insiders. Comparatively, 3.0% of Encore Capital Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Encore Capital Group beats Katapult on 11 of the 15 factors compared between the two stocks.
About Katapult
Katapult Holdings, Inc., an e-commerce focused financial technology company, provides e-commerce point-of-sale lease-purchase options for nonprime consumers in the United States. The company's technology platform provides nonprime consumers with a lease purchase option to enable them to obtain durable goods from its network of e-commerce retailers. It also offers Katapult Pay, a one-time use virtual card technology that makes lease purchasing and transactions. The company was formerly known as Cognical Holdings, Inc. and changed its name to Katapult Holdings, Inc. in February 2020. The company is headquartered in Plano, Texas.
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.
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