Credit Acceptance (NASDAQ:CACC – Get Free Report) and SoFi Technologies (NASDAQ:SOFI – Get Free Report) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.
Institutional and Insider Ownership
81.7% of Credit Acceptance shares are owned by institutional investors. Comparatively, 38.4% of SoFi Technologies shares are owned by institutional investors. 6.1% of Credit Acceptance shares are owned by insiders. Comparatively, 2.5% of SoFi Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings for Credit Acceptance and SoFi Technologies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Credit Acceptance | 0 | 3 | 1 | 0 | 2.25 |
| SoFi Technologies | 3 | 11 | 10 | 1 | 2.36 |
Credit Acceptance presently has a consensus price target of $565.00, suggesting a potential upside of 4.44%. SoFi Technologies has a consensus price target of $21.15, suggesting a potential upside of 25.48%. Given SoFi Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe SoFi Technologies is more favorable than Credit Acceptance.
Profitability
This table compares Credit Acceptance and SoFi Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Credit Acceptance | N/A | N/A | N/A |
| SoFi Technologies | N/A | N/A | N/A |
Valuation and Earnings
This table compares Credit Acceptance and SoFi Technologies”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Credit Acceptance | $2.31 billion | 2.45 | $475.72 million | $45.48 | 11.90 |
| SoFi Technologies | $4.31 billion | 5.06 | $619.95 million | $0.48 | 35.11 |
SoFi Technologies has higher revenue and earnings than Credit Acceptance. Credit Acceptance is trading at a lower price-to-earnings ratio than SoFi Technologies, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Credit Acceptance has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, SoFi Technologies has a beta of 2.33, suggesting that its share price is 133% more volatile than the S&P 500.
Summary
SoFi Technologies beats Credit Acceptance on 9 of the 12 factors compared between the two stocks.
About Credit Acceptance
Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company serves independent and franchised automobile dealers. Credit Acceptance Corporation was incorporated in 1972 and is headquartered in Southfield, Michigan.
About SoFi Technologies
SoFi Technologies, Inc. provides various financial services in the United States, Latin America, and Canada. It operates through three segments: Lending, Technology Platform, and Financial Services. The company offers lending and financial services and products that allows its members to borrow, save, spend, invest, and protect money. It offers personal loans, student loans, home loans, and related services. The company also operates Galileo, a technology platform that offers services to financial and non-financial institution; and Technisys, a cloud-native digital and core banking platform with financial services customers. In addition, it provides SoFi Money offers checking and savings accounts, debit cards, and cash management products; and SoFi Invest, a mobile-first investment platform that provides access to trading and advisory solutions, such as investing and robo-advisory. Further, the company offers SoFi Credit Card that provides cash backs on every purchase; Sofi Relay, a personal finance management product that allows to track all of their financial accounts comprising credit score and spending behaviors; SoFi Protect, which offers insurance product; SoFi Travel, an application that manages travel search and booking experience; SoFi At Work provides financial benefits to employees, including student loan payments made on their employees' behalf; Lantern Credit, a financial services marketplace platform for seeking alternative products and provide product comparisons; and other lending as a service that offers pre-qualified borrower referrals and sells loans to third-party partner. The company was founded in 2011 and is based in San Francisco, California.
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