Financial Contrast: Stem (STEM) versus Its Peers

Stem (NYSE:STEM) is one of 953 public companies in the “Software” industry, but how does it contrast to its peers? We will compare Stem to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, earnings, risk and profitability.

Institutional and Insider Ownership

61.6% of Stem shares are owned by institutional investors. Comparatively, 41.8% of shares of all “Software” companies are owned by institutional investors. 5.1% of Stem shares are owned by company insiders. Comparatively, 19.9% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Stem and its peers’ 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	-612.69%	20.88%	-8.98%

Valuation & Earnings

This table compares Stem and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Stem	$156.27 million	$137.76 million	-0.33
Stem Competitors	$1.81 billion	$385.92 million	108.72

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

Analyst Ratings

This is a summary of current ratings for Stem and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stem	1	4	1	0	2.00
Stem Competitors	5732	21470	44777	1493	2.57

Stem currently has a consensus price target of $6.54, indicating a potential upside of 132.30%. As a group, “Software” companies have a potential upside of 26.98%. Given Stem’s higher possible upside, analysts clearly believe Stem is more favorable than its peers.

Risk and Volatility

Stem has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500. Comparatively, Stem’s peers have a beta of 1.34, suggesting that their average share price is 34% more volatile than the S&P 500.

Summary

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

Stem Company Profile

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.