Critical Review: Cipher Mining (NASDAQ:CIFR) versus LM Funding America (NASDAQ:LMFA)

LM Funding America (NASDAQ:LMFA) and Cipher Mining (NASDAQ:CIFR) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Analyst Recommendations

This is a summary of current ratings and recommmendations for LM Funding America and Cipher Mining, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LM Funding America	0	1	0	0	2.00
Cipher Mining	0	0	10	2	3.17

Cipher Mining has a consensus target price of $8.14, indicating a potential upside of 37.83%. Given Cipher Mining’s stronger consensus rating and higher possible upside, analysts plainly believe Cipher Mining is more favorable than LM Funding America.

Profitability

This table compares LM Funding America and Cipher Mining’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LM Funding America	-96.23%	-35.84%	-31.86%
Cipher Mining	-33.39%	-8.29%	-7.29%

Insider & Institutional Ownership

22.7% of LM Funding America shares are held by institutional investors. Comparatively, 12.3% of Cipher Mining shares are held by institutional investors. 36.1% of LM Funding America shares are held by insiders. Comparatively, 2.3% of Cipher Mining shares are held by 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 LM Funding America and Cipher Mining”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LM Funding America	$12.98 million	0.76	-$15.94 million	($4.91)	-0.39
Cipher Mining	$126.84 million	16.19	-$25.78 million	($0.13)	-45.42

LM Funding America has higher earnings, but lower revenue than Cipher Mining. Cipher Mining is trading at a lower price-to-earnings ratio than LM Funding America, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

LM Funding America has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500. Comparatively, Cipher Mining has a beta of 2.41, indicating that its share price is 141% more volatile than the S&P 500.

Summary

Cipher Mining beats LM Funding America on 11 of the 15 factors compared between the two stocks.

About LM Funding America

LM Funding America, Inc. operates as a cryptocurrency mining and specialty finance company. It operates through two segments, Specialty Finance and Mining Operations. The company also engages in Bitcoin mining operations; and provides funding to nonprofit community associations. The company was founded in 2008 and is based in Tampa, Florida.

About Cipher Mining

Cipher Mining Inc., together with its subsidiaries, engages in the development and operation of industrial scale bitcoin mining data centers in the United States. The company was incorporated in 2020 and is based in New York, New York. Cipher Mining Inc. operates as a subsidiary of Bitfury Holding B.V.