Critical Contrast: Stem (STEM) vs. The Competition

Stem (NYSE:STEM) is one of 955 publicly-traded companies in the “Software” industry, but how does it contrast to its rivals? We will compare Stem to similar businesses based on the strength of its analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Profitability

This table compares Stem and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stem	-49.37%	N/A	-21.85%
Stem Competitors	-619.02%	18.31%	-8.93%

Earnings & Valuation

This table compares Stem and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Stem	$156.27 million	$137.76 million	-0.28
Stem Competitors	$1.80 billion	$385.05 million	112.31

Stem’s rivals have higher revenue and earnings than Stem. Stem is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

Stem has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500. Comparatively, Stem’s rivals have a beta of 1.26, suggesting that their average share price is 26% more volatile than the S&P 500.

Institutional & Insider Ownership

61.6% of Stem shares are held by institutional investors. Comparatively, 41.9% of shares of all “Software” companies are held by institutional investors. 5.1% of Stem shares are held by company insiders. Comparatively, 19.8% of shares of all “Software” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Stem and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stem	1	4	1	0	2.00
Stem Competitors	5710	21462	44701	1489	2.57

Stem currently has a consensus target price of $6.54, suggesting a potential upside of 173.02%. As a group, “Software” companies have a potential upside of 26.68%. Given Stem’s higher probable upside, research analysts clearly believe Stem is more favorable than its rivals.

Summary

Stem rivals beat Stem on 9 of the 13 factors compared.

About Stem

Stem, Inc. operates as a digitally connected, intelligent, and renewable energy storage network provider worldwide. The company offers energy storage hardware sourced from original equipment manufacturers (OEMs); edge hardware to aid in the collection of site data and real-time operation and control of the site and other optional equipment; and Athena, a software platform, which offers battery hardware and software-enabled services to operate the energy storage systems. It serves commercial and industrial enterprises, independent power producers, renewable project developers, and utilities and grid operators. The company was incorporated in 2009 and is headquartered in San Francisco, California.