LexinFintech (NASDAQ:LX – Get Free Report) and Bitfarms (NASDAQ:BITF – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.
Insider and Institutional Ownership
20.6% of Bitfarms shares are held by institutional investors. 27.8% of LexinFintech shares are held by company insiders. Comparatively, 9.5% of Bitfarms shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares LexinFintech and Bitfarms’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LexinFintech | 5.34% | 7.47% | 3.26% |
| Bitfarms | -69.08% | -22.17% | -18.93% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LexinFintech | 0 | 0 | 1 | 0 | 3.00 |
| Bitfarms | 0 | 1 | 6 | 0 | 2.86 |
Bitfarms has a consensus target price of $4.05, indicating a potential upside of 264.86%. Given Bitfarms’ higher possible upside, analysts plainly believe Bitfarms is more favorable than LexinFintech.
Volatility & Risk
LexinFintech has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Bitfarms has a beta of 3.68, suggesting that its stock price is 268% more volatile than the S&P 500.
Valuation & Earnings
This table compares LexinFintech and Bitfarms”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LexinFintech | $14.05 billion | 0.12 | $150.14 million | $0.63 | 16.71 |
| Bitfarms | $182.96 million | 2.91 | -$104.04 million | ($0.36) | -3.08 |
LexinFintech has higher revenue and earnings than Bitfarms. Bitfarms is trading at a lower price-to-earnings ratio than LexinFintech, indicating that it is currently the more affordable of the two stocks.
Summary
LexinFintech beats Bitfarms on 9 of the 14 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 Bitfarms
Bitfarms Ltd. engages in the mining of cryptocurrency coins and tokens in Canada, the United States, Paraguay, and Argentina. It owns and operates server farms that primarily validates transactions on the Bitcoin Blockchain and earning cryptocurrency from block rewards and transaction fees. The company also provides electrician services to commercial and residential customers in Quebec, Canada. It also undertakes hosting of third-party mining hardware. The company was founded in 2017 and is based in Toronto, Canada.
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