Head-To-Head Review: Runway Growth Finance (NASDAQ:RWAY) & Oportun Financial (NASDAQ:OPRT)

Oportun Financial (NASDAQ:OPRT) and Runway Growth Finance (NASDAQ:RWAY) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Valuation and Earnings

This table compares Oportun Financial and Runway Growth Finance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oportun Financial	$295.20 million	0.63	-$78.70 million	($2.01)	-2.54
Runway Growth Finance	$85.89 million	4.53	$44.34 million	$1.91	5.45

Runway Growth Finance has lower revenue, but higher earnings than Oportun Financial. Oportun Financial is trading at a lower price-to-earnings ratio than Runway Growth Finance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Oportun Financial and Runway Growth Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oportun Financial	0	1	2	1	3.00
Runway Growth Finance	0	3	2	0	2.40

Oportun Financial presently has a consensus price target of $9.00, indicating a potential upside of 76.13%. Runway Growth Finance has a consensus price target of $11.80, indicating a potential upside of 13.35%. Given Oportun Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe Oportun Financial is more favorable than Runway Growth Finance.

Institutional and Insider Ownership

82.7% of Oportun Financial shares are owned by institutional investors. Comparatively, 64.6% of Runway Growth Finance shares are owned by institutional investors. 9.3% of Oportun Financial shares are owned by company insiders. Comparatively, 1.7% of Runway Growth Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Oportun Financial has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Runway Growth Finance has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Profitability

This table compares Oportun Financial and Runway Growth Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oportun Financial	-7.86%	5.49%	0.60%
Runway Growth Finance	27.05%	12.91%	6.33%

About Oportun Financial

Oportun Financial Corporation provides financial services. The company offers personal loans and credit cards. It serves customers through online and over the phone, as well as through retail and Lending as a Service partner locations. The company was founded in 2005 and is headquartered in San Carlos, California.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.