Critical Survey: Consumer Portfolio Services (NASDAQ:CPSS) and Bitfarms (NASDAQ:BITF)

Consumer Portfolio Services (NASDAQ:CPSS) and Bitfarms (NASDAQ:BITF) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Valuation and Earnings

This table compares Consumer Portfolio Services 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
Consumer Portfolio Services	$202.25 million	0.93	$45.34 million	$0.79	11.13
Bitfarms	$182.96 million	2.06	-$104.04 million	($0.14)	-5.63

Consumer Portfolio Services has higher revenue and earnings than Bitfarms. Bitfarms is trading at a lower price-to-earnings ratio than Consumer Portfolio Services, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

47.6% of Consumer Portfolio Services shares are owned by institutional investors. Comparatively, 20.6% of Bitfarms shares are owned by institutional investors. 69.0% of Consumer Portfolio Services shares are owned by company insiders. Comparatively, 9.5% of Bitfarms shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Consumer Portfolio Services has a beta of 2.14, suggesting that its share price is 114% more volatile than the S&P 500. Comparatively, Bitfarms has a beta of 3.68, suggesting that its share price is 268% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Consumer Portfolio Services and Bitfarms, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consumer Portfolio Services	0	0	0	0	0.00
Bitfarms	0	1	6	0	2.86

Bitfarms has a consensus price target of $3.97, suggesting a potential upside of 403.38%. Given Bitfarms’ stronger consensus rating and higher probable upside, analysts clearly believe Bitfarms is more favorable than Consumer Portfolio Services.

Profitability

This table compares Consumer Portfolio Services and Bitfarms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consumer Portfolio Services	5.59%	7.59%	0.67%
Bitfarms	-69.08%	-22.17%	-18.93%

Summary

Consumer Portfolio Services beats Bitfarms on 9 of the 14 factors compared between the two stocks.

About Consumer Portfolio Services

Consumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories or past credit problems. It also serves as an alternative source of financing for dealers, facilitating sales to customers who are not able to obtain financing from commercial banks, credit unions, and the captive finance companies. In addition, the company acquires installment purchase contracts in merger and acquisition transactions; purchases immaterial amounts of vehicle purchase money loans from non-affiliated lenders. It services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was incorporated in 1991 and is based in Las Vegas, Nevada.

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.