Critical Review: Applied Digital (NASDAQ:APLD) & Synchrony Financial (NYSE:SYF)

Applied Digital (NASDAQ:APLD) and Synchrony Financial (NYSE:SYF) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Earnings and Valuation

This table compares Applied Digital and Synchrony Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Digital	$144.19 million	53.89	-$231.07 million	($0.74)	-36.74
Synchrony Financial	$22.60 billion	1.08	$3.55 billion	$9.76	7.47

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

Volatility & Risk

Applied Digital has a beta of 5.67, meaning that its share price is 467% more volatile than the S&P 500. Comparatively, Synchrony Financial has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Applied Digital and Synchrony Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Digital	2	0	12	3	2.94
Synchrony Financial	0	8	12	0	2.60

Applied Digital currently has a consensus target price of $67.15, indicating a potential upside of 146.97%. Synchrony Financial has a consensus target price of $86.89, indicating a potential upside of 19.24%. Given Applied Digital’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Applied Digital is more favorable than Synchrony Financial.

Profitability

This table compares Applied Digital and Synchrony Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Digital	-52.84%	-15.91%	-4.62%
Synchrony Financial	15.44%	23.09%	2.98%

Insider and Institutional Ownership

65.7% of Applied Digital shares are owned by institutional investors. Comparatively, 96.5% of Synchrony Financial shares are owned by institutional investors. 9.5% of Applied Digital shares are owned by company insiders. Comparatively, 0.4% of Synchrony Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Synchrony Financial beats Applied Digital on 8 of the 14 factors compared between the two stocks.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.

About Synchrony Financial

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans. The company also offers private label credit cards, dual co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts, and sweep and affinity deposits, as well as accepts deposits through third-party securities brokerage firms. In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; and healthcare payments and financing solutions under the CareCredit and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries, such as American Eagle, Dick's Sporting Goods, Guitar Center, Kawasaki, Pandora, Polaris, Suzuki, and Sweetwater. The company offers its credit products through programs established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations, and healthcare service providers; and deposit products through various channels, such as digital and print. It serves digital, health and wellness, retail, home, auto, telecommunications, jewelry, pets, and other industries. The company was founded in 1932 and is headquartered in Stamford, Connecticut.