Head-To-Head Review: LendingClub (NYSE:LC) and LexinFintech (NASDAQ:LX)

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

Profitability

This table compares LexinFintech and LendingClub’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LexinFintech	7.94%	8.59%	4.50%
LendingClub	16.99%	11.92%	1.55%

Volatility and Risk

LexinFintech has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, LendingClub has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500.

Earnings and Valuation

This table compares LexinFintech and LendingClub”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LexinFintech	$1.88 billion	0.07	$239.82 million	$0.84	0.89
LendingClub	$1.03 billion	2.14	$135.68 million	$1.49	12.89

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

Insider & Institutional Ownership

74.1% of LendingClub shares are held by institutional investors. 27.8% of LexinFintech shares are held by insiders. Comparatively, 3.2% of LendingClub shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for LexinFintech and LendingClub, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LexinFintech	1	2	0	0	1.67
LendingClub	0	2	6	1	2.89

LexinFintech presently has a consensus target price of $2.35, indicating a potential upside of 214.26%. LendingClub has a consensus target price of $23.07, indicating a potential upside of 20.10%. Given LexinFintech’s higher probable upside, equities research analysts plainly believe LexinFintech is more favorable than LendingClub.

Summary

LendingClub beats LexinFintech on 10 of the 15 factors compared between the two stocks.

About LexinFintech

LexinFintech Holdings Ltd., through its subsidiaries, provides online consumer finance services in the People's Republic of China. The company operates Fenqile.com, an online consumption and consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales with installment payment terms; and Le Hua Card, a scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, enhance operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya application, a location-based services shopping experience with buy-now and pay-later options; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.

About LendingClub

LendingClub Corporation, operates as a bank holding company, that provides range of financial products and services in the United States. It offers deposit products, including savings accounts, checking accounts, and certificates of deposit. The company also provides loan products, such as consumer loans comprising unsecured personal loans, secured auto refinance loans, and patient and education finance loans; and commercial loans, including small business loans. In addition, it operates an online lending marketplace platform. The company was incorporated in 2006 and is headquartered in San Francisco, California.