Head to Head Survey: Oaktree Specialty Lending (NASDAQ:OCSL) vs. Affirm (NASDAQ:AFRM)

Oaktree Specialty Lending (NASDAQ:OCSLGet Rating) and Affirm (NASDAQ:AFRMGet Rating) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Profitability

This table compares Oaktree Specialty Lending and Affirm’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Oaktree Specialty Lending 89.41% 8.82% 4.50%
Affirm -74.96% -22.95% -10.26%

Earnings and Valuation

This table compares Oaktree Specialty Lending and Affirm’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Oaktree Specialty Lending $209.38 million 6.40 $237.26 million $1.28 5.80
Affirm $870.46 million 11.50 -$430.92 million ($3.24) -10.86

Oaktree Specialty Lending has higher earnings, but lower revenue than Affirm. Affirm is trading at a lower price-to-earnings ratio than Oaktree Specialty Lending, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Oaktree Specialty Lending and Affirm, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oaktree Specialty Lending 0 0 2 0 3.00
Affirm 1 6 8 0 2.47

Oaktree Specialty Lending currently has a consensus target price of $8.00, suggesting a potential upside of 7.82%. Affirm has a consensus target price of $83.60, suggesting a potential upside of 137.57%. Given Affirm’s higher probable upside, analysts plainly believe Affirm is more favorable than Oaktree Specialty Lending.

Insider & Institutional Ownership

63.3% of Oaktree Specialty Lending shares are owned by institutional investors. Comparatively, 43.2% of Affirm shares are owned by institutional investors. 0.3% of Oaktree Specialty Lending shares are owned by company insiders. Comparatively, 16.5% of Affirm shares are owned 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.

Volatility & Risk

Oaktree Specialty Lending has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Affirm has a beta of 2.79, indicating that its stock price is 179% more volatile than the S&P 500.

Summary

Oaktree Specialty Lending beats Affirm on 8 of the 14 factors compared between the two stocks.

About Oaktree Specialty Lending (Get Rating)

Oaktree Specialty Lending Corporation is a business development company specializing in investments in middle market, bridge financing, first and second lien debt financing, unsecured and mezzanine loan, mezzanine debt, senior and junior secured debt, expansions, sponsor-led acquisitions, preferred equity and management buyouts in small and mid-sized companies. It seeks to invest in education services, business services, retail and consumer, healthcare, manufacturing, food and restaurants, construction and engineering, and media and advertising sectors. It invests between $5 million to $75 million principally in the form of one-stop, first lien, and second lien debt investments, which may include an equity co-investment component in companies with enterprise value between $20 million and $150 million and EBITDA between $3 million and $50 million. The fund has a hold size of up to $75 million and may underwrite transactions up to $100 million. It primarily invests in North America. The fund seeks to be a lead investor in its portfolio companies.

About Affirm (Get Rating)

Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States and Canada. The company's platform includes point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app. Its payments network and partnership with an originating bank, enables consumers to pay for a purchase over time with terms ranging from one to forty-eight months. As of June 30, 2021, the company had approximately 29,000 merchants integrated on its platform covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies. Its merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel, apparel, accessories, consumer electronics, and jewelry. The company was founded in 2012 and is headquartered in San Francisco, California.

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