Contrasting Upstart (NASDAQ:UPST) and loanDepot (NYSE:LDI)

Upstart (NASDAQ:UPST) and loanDepot (NYSE:LDI) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Volatility and Risk

Upstart has a beta of 2.39, suggesting that its share price is 139% more volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.38, suggesting that its share price is 238% more volatile than the S&P 500.

Institutional and Insider Ownership

63.0% of Upstart shares are held by institutional investors. Comparatively, 39.4% of loanDepot shares are held by institutional investors. 16.7% of Upstart shares are held by insiders. Comparatively, 83.0% of loanDepot shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Upstart and loanDepot”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upstart	$714.41 million	6.31	-$128.58 million	($0.75)	-63.19
loanDepot	$831.14 million	0.48	-$110.14 million	($0.45)	-2.72

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

Profitability

This table compares Upstart and loanDepot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upstart	-20.20%	-25.87%	-7.95%
loanDepot	-8.95%	-14.66%	-1.49%

Analyst Ratings

This is a summary of recent recommendations and price targets for Upstart and loanDepot, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upstart	1	7	5	0	2.31
loanDepot	1	2	0	0	1.67

Upstart presently has a consensus target price of $63.81, suggesting a potential upside of 34.64%. loanDepot has a consensus target price of $1.98, suggesting a potential upside of 61.22%. Given loanDepot’s higher possible upside, analysts plainly believe loanDepot is more favorable than Upstart.

Summary

loanDepot beats Upstart on 10 of the 14 factors compared between the two stocks.

About Upstart

Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.

About loanDepot

loanDepot, Inc. engages in originating, financing, selling, and servicing residential mortgage loans in the United States. The company offers conventional agency-conforming and prime jumbo, federal assistance residential mortgage, and home equity loans. It also provides settlement services, which include captive title and escrow business; real estate services that cover captive real estate referral business; and insurance services, including services to homeowners, as well as other consumer insurance policies. The company was founded in 2010 and is headquartered in Irvine, California.