Financial Comparison: Affirm (NASDAQ:AFRM) vs. Cannae (NYSE:CNNE)

Cannae (NYSE:CNNE) and Affirm (NASDAQ:AFRM) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Institutional & Insider Ownership

88.1% of Cannae shares are held by institutional investors. Comparatively, 69.3% of Affirm shares are held by institutional investors. 10.9% of Cannae shares are held by company insiders. Comparatively, 11.0% of Affirm shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Cannae and Affirm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cannae	-38.18%	-14.10%	-10.60%
Affirm	45.29%	47.91%	14.46%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Cannae and Affirm, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cannae	1	1	2	0	2.25
Affirm	0	8	24	0	2.75

Cannae presently has a consensus price target of $16.50, suggesting a potential upside of 4.56%. Affirm has a consensus price target of $98.78, suggesting a potential upside of 38.11%. Given Affirm’s stronger consensus rating and higher possible upside, analysts clearly believe Affirm is more favorable than Cannae.

Earnings and Valuation

This table compares Cannae and Affirm”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cannae	$408.60 million	1.68	-$513.20 million	($3.02)	-5.23
Affirm	$4.26 billion	5.66	$1.93 billion	$5.52	12.96

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

Volatility & Risk

Cannae has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Affirm has a beta of 3.61, meaning that its stock price is 261% more volatile than the S&P 500.

Summary

Affirm beats Cannae on 13 of the 14 factors compared between the two stocks.

About Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.

About Affirm

Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. The company's platform includes point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app. Its commerce platform, agreements with originating banks, and capital markets partners enables consumers to pay for a purchase over time with terms ranging up to 60 months. The company has active merchants covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies with an omni-channel presence. Its merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel and ticketing, apparel, accessories, consumer electronics, and jewelry. Affirm Holdings, Inc. was founded in 2012 and is headquartered in San Francisco, California.