Critical Analysis: Consumer Portfolio Services (CPSS) versus LexinFintech (LX)
LexinFintech (NASDAQ:LX) and Consumer Portfolio Services (NASDAQ:CPSS) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
This is a summary of recent ratings and target prices for LexinFintech and Consumer Portfolio Services, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Consumer Portfolio Services||0||0||2||0||3.00|
Institutional and Insider Ownership
6.9% of LexinFintech shares are held by institutional investors. Comparatively, 41.7% of Consumer Portfolio Services shares are held by institutional investors. 46.2% of Consumer Portfolio Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares LexinFintech and Consumer Portfolio Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Consumer Portfolio Services||0.24%||8.52%||0.66%|
Earnings and Valuation
This table compares LexinFintech and Consumer Portfolio Services’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|LexinFintech||$857.97 million||1.77||$36.94 million||$0.22||42.23|
|Consumer Portfolio Services||$434.38 million||0.18||$3.76 million||$0.80||4.24|
LexinFintech has higher revenue and earnings than Consumer Portfolio Services. Consumer Portfolio Services is trading at a lower price-to-earnings ratio than LexinFintech, indicating that it is currently the more affordable of the two stocks.
Consumer Portfolio Services beats LexinFintech on 7 of the 12 factors compared between the two stocks.
LexinFintech Holdings Ltd., through its subsidiaries, operates as an online consumer finance platform for young adults in the People's Republic of China. The company operates Fenqile, an online consumer finance platform that offers personal installment loans, installment purchase loans, and other loan products, as well as Le Card credit line. It also matches customer loans with diversified funding sources, including individual investors on its Juzi Licai online investment platform, institutional funding partners in its direct lending programs, and investors of its asset-backed securities. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.
About Consumer Portfolio Services
Consumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It purchases and services retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories, low incomes, or past credit problems. It serves as an alternative source of financing for dealers, facilitating sales to customers who might not be able to obtain financing from commercial banks, credit unions, and the captive finance companies. The company also acquires installment purchase contracts in four merger and acquisition transactions; and offers financing directly to sub-prime consumers to facilitate their purchase of a new or used automobile, light truck, or passenger van. Consumer Portfolio Services, Inc. services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was founded in 1991 and is headquartered in Irvine, California.
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