Consumer Portfolio Services (NASDAQ:CPSS) versus Upstart (NASDAQ:UPST) Critical Comparison

Consumer Portfolio Services (NASDAQ:CPSS) and Upstart (NASDAQ:UPST) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Profitability

This table compares Consumer Portfolio Services and Upstart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consumer Portfolio Services	4.99%	7.48%	0.55%
Upstart	4.86%	9.67%	2.50%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Consumer Portfolio Services and Upstart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consumer Portfolio Services	0	1	0	0	2.00
Upstart	1	9	7	0	2.35

Upstart has a consensus target price of $32.40, indicating a potential upside of 65.64%. Given Upstart’s stronger consensus rating and higher possible upside, analysts plainly believe Upstart is more favorable than Consumer Portfolio Services.

Risk and Volatility

Consumer Portfolio Services has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Upstart has a beta of 2.48, meaning that its stock price is 148% more volatile than the S&P 500.

Institutional and Insider Ownership

47.6% of Consumer Portfolio Services shares are owned by institutional investors. Comparatively, 63.0% of Upstart shares are owned by institutional investors. 63.8% of Consumer Portfolio Services shares are owned by company insiders. Comparatively, 17.3% of Upstart shares are owned 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.

Earnings & Valuation

This table compares Consumer Portfolio Services and Upstart”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consumer Portfolio Services	$434.47 million	0.48	$19.33 million	$1.02	9.34
Upstart	$1.04 billion	1.85	$53.60 million	$0.59	33.15

Upstart has higher revenue and earnings than Consumer Portfolio Services. Consumer Portfolio Services is trading at a lower price-to-earnings ratio than Upstart, indicating that it is currently the more affordable of the two stocks.

Summary

Upstart beats Consumer Portfolio Services on 11 of the 14 factors compared between the two stocks.

About Consumer Portfolio Services

Consumer Portfolio Services, Inc. is a specialty finance company focused on automobile lending. It provides financing to consumers who may have difficulty obtaining loans through traditional sources, including borrowers with limited or impaired credit histories. The company works with franchise and independent automobile dealers across the United States, purchasing retail installment contracts they originate for vehicle buyers. Consumer Portfolio Services also services the contracts it acquires and uses funding arrangements that include asset-backed securitizations.

About Upstart

Upstart Holdings, Inc. operates an artificial intelligence–based lending marketplace that connects consumers seeking loans with banks and credit unions. Its platform uses machine-learning models and borrower data to help lending partners assess credit risk and make lending decisions. The company’s offerings include personal loans and technology for auto lending, including auto retail and refinancing. Upstart was founded in 2012 by Dave Girouard, Paul Gu and Anna Counselman. Girouard serves as the company’s chief executive officer.