PRA Group (NASDAQ:PRAA – Get Free Report) and SoFi Technologies (NASDAQ:SOFI – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Valuation & Earnings
This table compares PRA Group and SoFi Technologies”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PRA Group | $1.20 billion | 0.61 | -$305.14 million | ($6.73) | -2.90 |
| SoFi Technologies | $3.61 billion | 5.99 | $481.32 million | $0.55 | 30.47 |
SoFi Technologies has higher revenue and earnings than PRA Group. PRA Group is trading at a lower price-to-earnings ratio than SoFi Technologies, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
PRA Group has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, SoFi Technologies has a beta of 2.33, suggesting that its stock price is 133% more volatile than the S&P 500.
Profitability
This table compares PRA Group and SoFi Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PRA Group | -19.91% | 15.56% | 3.18% |
| SoFi Technologies | 15.60% | 6.89% | 1.35% |
Analyst Ratings
This is a summary of recent ratings and target prices for PRA Group and SoFi Technologies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PRA Group | 1 | 3 | 1 | 0 | 2.00 |
| SoFi Technologies | 3 | 10 | 10 | 1 | 2.38 |
PRA Group currently has a consensus target price of $26.00, indicating a potential upside of 33.40%. SoFi Technologies has a consensus target price of $21.23, indicating a potential upside of 26.64%. Given PRA Group’s higher possible upside, research analysts clearly believe PRA Group is more favorable than SoFi Technologies.
Institutional & Insider Ownership
97.2% of PRA Group shares are held by institutional investors. Comparatively, 38.4% of SoFi Technologies shares are held by institutional investors. 2.2% of PRA Group shares are held by insiders. Comparatively, 2.5% of SoFi Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
SoFi Technologies beats PRA Group on 11 of the 15 factors compared between the two stocks.
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.
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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