Critical Analysis: Solid Power (NASDAQ:SLDP) and Adient (NYSE:ADNT)

Solid Power (NASDAQ:SLDP) and Adient (NYSE:ADNT) are both small-cap auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Profitability

This table compares Solid Power and Adient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Solid Power	-485.47%	-21.57%	-20.02%
Adient	0.39%	7.28%	1.67%

Valuation and Earnings

This table compares Solid Power and Adient”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solid Power	$21.75 million	27.00	-$93.41 million	($0.48)	-5.44
Adient	$14.54 billion	0.10	-$281.00 million	$0.71	25.58

Solid Power has higher earnings, but lower revenue than Adient. Solid Power is trading at a lower price-to-earnings ratio than Adient, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Solid Power has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, Adient has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Solid Power and Adient, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solid Power	1	1	3	0	2.40
Adient	1	6	5	0	2.33

Solid Power currently has a consensus target price of $6.92, indicating a potential upside of 165.01%. Adient has a consensus target price of $28.44, indicating a potential upside of 56.61%. Given Solid Power’s stronger consensus rating and higher probable upside, research analysts plainly believe Solid Power is more favorable than Adient.

Institutional and Insider Ownership

33.7% of Solid Power shares are held by institutional investors. Comparatively, 92.4% of Adient shares are held by institutional investors. 5.7% of Solid Power shares are held by company insiders. Comparatively, 0.9% of Adient shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Adient beats Solid Power on 8 of the 14 factors compared between the two stocks.

About Solid Power

Solid Power, Inc. develops solid state battery technologies for the electric vehicles (EV) and other markets in the United States. The company sells its sulfide-based solid electrolyte; and licenses its solid-state cell designs and manufacturing processes. It also produces and sells 0.2, 2, 20 ampere-hour (Ah), and EV cells. Solid Power, Inc. was founded in 2011 and is headquartered in Louisville, Colorado.

About Adient

Adient plc engages in the design, development, manufacture, and market of seating systems and components for passenger cars, commercial vehicles, and light trucks. The company's automotive seating solutions include complete seating systems, frames, mechanisms, foams, head restraints, armrests, and trim covers. It serves automotive original equipment manufacturers in North America and South America; Europe, Middle East, and Africa; and the Asia Pacific/China. Adient plc was incorporated in 2016 and is based in Dublin, Ireland.