Critical Comparison: Qudian (QD) versus NowAuto Group (CAFI)

Qudian (NYSE:QD) and NowAuto Group (OTCMKTS:CAFI) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares Qudian and NowAuto Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Qudian 30.49% 22.42% 12.53%
NowAuto Group N/A N/A N/A

Institutional & Insider Ownership

4.3% of Qudian shares are held by institutional investors. 11.9% of NowAuto Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Qudian and NowAuto Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Qudian $733.96 million 2.31 $332.67 million N/A N/A
NowAuto Group N/A N/A N/A N/A N/A

Qudian has higher revenue and earnings than NowAuto Group.

Volatility & Risk

Qudian has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, NowAuto Group has a beta of 2.79, meaning that its share price is 179% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Qudian and NowAuto Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Qudian 0 5 0 0 2.00
NowAuto Group 0 0 0 0 N/A

Qudian presently has a consensus target price of $17.75, suggesting a potential upside of 246.00%. Given Qudian’s higher probable upside, analysts plainly believe Qudian is more favorable than NowAuto Group.

Summary

Qudian beats NowAuto Group on 6 of the 8 factors compared between the two stocks.

About Qudian

Qudian Inc. provides online small consumer credit products in the People's Republic of China. It uses big data-enabled technologies, including artificial intelligence and machine learning to transform the consumer finance experience. The company offers cash credit products, such as cash short-term unsecured lines of credit, which are distributed in digital form; and merchandise credit products to finance borrowers' direct purchase of merchandise offered on its marketplace on installment basis, as well as budget auto financing products. Qudian Inc. was founded in 2014 and is headquartered in Beijing, the People's Republic of China.

About NowAuto Group

Consumer Automotive Finance Inc. operates as a retailer in the used vehicle market of the United States. It focuses primarily on the buy here/pay here segment of the independent used vehicle sales and finance market. The company sells approximately 2000 and newer model-year used vehicles and provides related financing through sale type leases. As of December 31, 2010, it had two retail locations in Arizona. The company was formerly known as NowAuto Group, Inc. Consumer Automotive Finance Inc. is based in Las Vegas, Nevada.

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