Head to Head Analysis: Sound Point Meridian Capital (NYSE:SPMC) versus Bakkt (NYSE:BKKT)

Sound Point Meridian Capital (NYSE:SPMC) and Bakkt (NYSE:BKKT) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sound Point Meridian Capital and Bakkt, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Point Meridian Capital	0	2	1	1	2.75
Bakkt	1	0	1	0	2.00

Sound Point Meridian Capital currently has a consensus price target of $15.12, suggesting a potential upside of 141.42%. Bakkt has a consensus price target of $12.00, suggesting a potential upside of 227.51%. Given Bakkt’s higher possible upside, analysts plainly believe Bakkt is more favorable than Sound Point Meridian Capital.

Volatility & Risk

Sound Point Meridian Capital has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Bakkt has a beta of 4.7, meaning that its stock price is 370% more volatile than the S&P 500.

Valuation and Earnings

This table compares Sound Point Meridian Capital and Bakkt”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Point Meridian Capital	-$121.96 million	-1.05	-$118.47 million	($5.78)	-1.08
Bakkt	$862.12 million	0.19	-$107.21 million	$0.45	8.14

Bakkt has higher revenue and earnings than Sound Point Meridian Capital. Sound Point Meridian Capital is trading at a lower price-to-earnings ratio than Bakkt, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sound Point Meridian Capital and Bakkt’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Point Meridian Capital	N/A	N/A	N/A
Bakkt	-0.21%	-21.17%	-17.93%

Institutional and Insider Ownership

11.1% of Bakkt shares are held by institutional investors. 0.9% of Sound Point Meridian Capital shares are held by company insiders. Comparatively, 10.1% of Bakkt shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Bakkt beats Sound Point Meridian Capital on 9 of the 14 factors compared between the two stocks.

About Sound Point Meridian Capital

Sound Point Meridian Capital, Inc. (NYSE: SPMC) is a closed-end investment company focused on investing in collateralized loan obligations (CLOs). The company primarily seeks exposure to CLO equity and junior debt tranches, which are backed by pools of senior secured loans made to corporate borrowers. Sound Point Meridian Capital is externally managed by an affiliate of Sound Point Capital Management, an alternative investment manager. Its investment strategy is designed to provide shareholders with income and potential capital appreciation through a diversified portfolio of CLO investments rather than through the direct operation of businesses or the sale of consumer products and services.

About Bakkt

Bakkt Holdings, Inc. provides technology that helps businesses offer cryptocurrency services to their customers. Its platform supports crypto buying and selling, along with custody and related infrastructure, which companies can integrate into their own products and services. The company serves businesses including financial institutions and fintech firms, offering tools designed to connect customers with digital assets. Bakkt was founded in 2018 by Intercontinental Exchange and initially operated across cryptocurrency and loyalty services before shifting its focus toward crypto infrastructure.