Critical Analysis: PPDAI Group (PPDF) & Lendingtree (TREE)

PPDAI Group (NYSE:PPDF) and Lendingtree (NASDAQ:TREE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Profitability

This table compares PPDAI Group and Lendingtree’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PPDAI Group 29.39% 25.97% 11.78%
Lendingtree 12.73% 12.86% 6.08%

Analyst Recommendations

This is a breakdown of current recommendations for PPDAI Group and Lendingtree, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PPDAI Group 0 2 2 0 2.50
Lendingtree 1 6 8 0 2.47

PPDAI Group currently has a consensus price target of $12.00, suggesting a potential upside of 116.22%. Lendingtree has a consensus price target of $335.27, suggesting a potential upside of 28.78%. Given PPDAI Group’s stronger consensus rating and higher probable upside, analysts clearly believe PPDAI Group is more favorable than Lendingtree.

Institutional and Insider Ownership

6.7% of PPDAI Group shares are held by institutional investors. Comparatively, 86.3% of Lendingtree shares are held by institutional investors. 20.5% of Lendingtree shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares PPDAI Group and Lendingtree’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PPDAI Group $596.44 million 2.80 $166.44 million N/A N/A
Lendingtree $617.74 million 5.41 $15.57 million $3.02 86.21

PPDAI Group has higher earnings, but lower revenue than Lendingtree.

Summary

PPDAI Group beats Lendingtree on 6 of the 11 factors compared between the two stocks.

About PPDAI Group

PPDAI Group Inc., an investment holding company, operates an online consumer finance marketplace through its platform in the People's Republic of China. It provides services to match borrowers with investors and facilitate loan transactions on its marketplace through the lifecycle of loans. The company offers standard and other loan products; and investment services to investors. As of December 31, 2017, it had approximately 65 million cumulative registered users. The company was founded in 2007 and is headquartered in Shanghai, the People's Republic of China.

About Lendingtree

LendingTree, Inc. engages in the operation of online loan marketplace for consumers seeking loans and other credit-based offerings. It provides mortgage loans, home equity, reverse mortgage, auto loans, credit cards, personal loans, student loans, and small business loans. The company was founded Douglas Lebda in April 2008 and is headquartered in Charlotte, NC.

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