Regional Management (NYSE:RM) vs. Vroom (NASDAQ:VRM) Financial Analysis

Vroom (NASDAQ:VRM) and Regional Management (NYSE:RM) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Risk & Volatility

Vroom has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Regional Management has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Vroom and Regional Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vroom	1	0	0	0	1.00
Regional Management	0	2	2	0	2.50

Regional Management has a consensus target price of $43.00, suggesting a potential upside of 25.51%. Given Regional Management’s stronger consensus rating and higher possible upside, analysts plainly believe Regional Management is more favorable than Vroom.

Valuation and Earnings

This table compares Vroom and Regional Management”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vroom	$178.83 million	0.30	-$7.96 million	($11.12)	-0.92
Regional Management	$645.60 million	0.49	$44.41 million	$4.75	7.21

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vroom	-32.38%	-47.65%	-5.59%
Regional Management	6.98%	12.49%	2.25%

Insider and Institutional Ownership

25.8% of Vroom shares are owned by institutional investors. Comparatively, 98.9% of Regional Management shares are owned by institutional investors. 2.9% of Vroom shares are owned by insiders. Comparatively, 10.9% of Regional Management shares are owned by 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.

Summary

Regional Management beats Vroom on 13 of the 14 factors compared between the two stocks.

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.

About Regional Management

Regional Management Corp., a diversified consumer finance company, provides various installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders in the United States. It offers small and large installment loans; and retail loans to finance the purchase of furniture, appliances, and other retail products. The company also provides insurance products, including credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance; collateral protection insurance; and property insurance, as well as reinsurance products. In addition, its loans are sourced through branches, centrally-managed direct mail campaigns, and digital partners, as well as its consumer website. The company was incorporated in 1987 and is headquartered in Greer, South Carolina.