The shares of Vonage Holdings Corp. (NYSE:VG) and LendingClub Corporation (NYSE:LC) were among the active stocks of the last trading sessions. Vonage Holdings Corp. (NYSE:VG) declined to -2.09% closing at the price of $13.58 whereas the shares of LendingClub Corporation (NYSE:LC) declined -0.56% with the decrease of -0.02 points closing at the price of $3.58. Vonage Holdings Corp. has currently increase 22.01% in its stock over the period of 6-months while its rival LendingClub Corporation added 8.16% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Vonage Holdings Corp. (NYSE:VG) is 7.2% while the ROI of LendingClub Corporation (NYSE:LC) is -4.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VG’s EBITDA Margin is 22.42 whereas LC’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for Vonage Holdings Corp. (NYSE:VG) and LendingClub Corporation (NYSE:LC).
EPS & Surprise Factor
Vonage Holdings Corp. (NYSE:VG) reported $0.07/share EPS for the previous quarter where analysts were predicting an EPS to be $0.07/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, LendingClub Corporation (NYSE:LC) reported EPS of $0.03/share in the last quarter. The analysts projected EPS of $0.02/share depicting a Surprise of 50 Percent.
Taking a look at Earnings per Share, LendingClub Corporation tends to be beating the analyst estimates more than Vonage Holdings Corp.. so LC is more profitable than VG.
Technical Analysis of Vonage Holdings Corp. & LendingClub Corporation
Moving average convergence divergence (MACD) shows that Vonage Holdings Corp. (NYSE:VG) is on a PRICE RELATIVITY trend While LendingClub Corporation (NYSE:LC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Vonage Holdings Corp. was in BEARISH territory and LendingClub Corporation was in BEARISH territory.
VG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While LC’s candle is BEARISH with HIGH.
EPS Growth Rate: VG’s 10% versus LC’s -8.6%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Vonage Holdings Corp. (NYSE:VG) is predicted at 10% while LendingClub Corporation (NYSE:LC) stands at -8.6%. These numbers suggest that VG is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of VG stands at 0.7 while LC is at 0 whereas the debt ratio of the prior is 0.38 while the debt ratio of the later is 3.13.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.6 for VG and 2.6 for LC which means VG has Buy rating whereas LC has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for VG is $17.5 which is 22.4% of its current price while LC has price target of 5.04 which is 28.97% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
VG currently has price to earning P/E ratio of 51.25 whereas LC has 0 while the forward P/E ratio for the prior stands at 40.54 and for the later it depicts the value of 18.84.
The price to Book P/B for VG is 6.23, Price to Sale is at 3.14 and for LC these ratios stand at 1.73 and 1.36.