Contrasting Vroom (NASDAQ:VRM) & FirstCash (NASDAQ:FCFS)

FirstCash (NASDAQ:FCFS) and Vroom (NASDAQ:VRM) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Valuation and Earnings

This table compares FirstCash and Vroom”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstCash	$3.66 billion	2.55	$330.38 million	$8.76	24.58
Vroom	$178.83 million	0.28	-$7.96 million	($11.12)	-0.86

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

Risk and Volatility

FirstCash has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Vroom has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for FirstCash and Vroom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstCash	0	1	4	0	2.80
Vroom	1	0	0	0	1.00

FirstCash currently has a consensus price target of $249.00, suggesting a potential upside of 15.63%. Given FirstCash’s stronger consensus rating and higher probable upside, research analysts plainly believe FirstCash is more favorable than Vroom.

Insider & Institutional Ownership

80.3% of FirstCash shares are held by institutional investors. Comparatively, 25.8% of Vroom shares are held by institutional investors. 2.9% of FirstCash shares are held by company insiders. Comparatively, 2.9% of Vroom 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.

Profitability

This table compares FirstCash and Vroom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstCash	9.42%	19.65%	8.38%
Vroom	-32.38%	-47.65%	-5.59%

Summary

FirstCash beats Vroom on 12 of the 14 factors compared between the two stocks.

About FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.

About Vroom

Vroom, Inc. operates as an automotive finance company. The company offers vehicle financing to its customers through third party dealers under the UACC brand. It also provides artificial intelligence powered analytics and digital services to dealers, automotive financial services companies, and others in the automotive industry for automotive retail. The company was formerly known as Auto America, Inc. and changed its name to Vroom, Inc. in July 2015. Vroom, Inc. was incorporated in 2012 and is based in Houston, Texas.