Financial Survey: Open Lending (NASDAQ:LPRO) & Bread Financial (NYSE:BFH)

Open Lending (NASDAQ:LPRO) and Bread Financial (NYSE:BFH) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

78.1% of Open Lending shares are held by institutional investors. Comparatively, 99.5% of Bread Financial shares are held by institutional investors. 15.0% of Open Lending shares are held by insiders. Comparatively, 0.6% of Bread Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Open Lending and Bread Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Open Lending	0	5	3	0	2.38
Bread Financial	4	7	3	0	1.93

Open Lending currently has a consensus price target of $6.79, suggesting a potential upside of 18.01%. Bread Financial has a consensus price target of $39.17, suggesting a potential downside of 2.72%. Given Open Lending’s stronger consensus rating and higher probable upside, equities analysts clearly believe Open Lending is more favorable than Bread Financial.

Risk & Volatility

Open Lending has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Profitability

This table compares Open Lending and Bread Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Open Lending	18.79%	10.45%	5.82%
Bread Financial	8.08%	14.44%	1.88%

Valuation & Earnings

This table compares Open Lending and Bread Financial’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Open Lending	$109.84 million	6.22	$22.07 million	$0.11	52.27
Bread Financial	$5.17 billion	0.39	$718.00 million	$7.94	5.07

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

Summary

Open Lending beats Bread Financial on 7 of the 13 factors compared between the two stocks.

About Open Lending

Open Lending Corporation provides lending enablement and risk analytics solutions to credit unions, regional banks, finance companies, and captive finance companies of automakers in the United States. The company offers Lenders Protection Program (LPP), which is a cloud-based automotive lending platform that provides loan analytics solutions and automated issuance of credit default insurance with third-party insurance providers. Its LPP products include loan analytics, risk-based loan pricing, risk modeling, and automated decision technology for automotive lenders. Open Lending Corporation was founded in 2000 and is based in Austin, Texas.

About Bread Financial

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.