Critical Review: ScanSource (NASDAQ:SCSC) versus Eos Energy Enterprises (NASDAQ:EOSE)

ScanSource (NASDAQ:SCSC) and Eos Energy Enterprises (NASDAQ:EOSE) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Valuation and Earnings

This table compares ScanSource and Eos Energy Enterprises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ScanSource	$3.04 billion	0.32	$71.55 million	$3.01	14.65
Eos Energy Enterprises	$15.61 million	209.74	-$685.87 million	($5.22)	-2.41

ScanSource has higher revenue and earnings than Eos Energy Enterprises. Eos Energy Enterprises is trading at a lower price-to-earnings ratio than ScanSource, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

ScanSource has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Eos Energy Enterprises has a beta of 2.29, suggesting that its share price is 129% more volatile than the S&P 500.

Institutional and Insider Ownership

97.9% of ScanSource shares are held by institutional investors. Comparatively, 54.9% of Eos Energy Enterprises shares are held by institutional investors. 4.2% of ScanSource shares are held by company insiders. Comparatively, 3.3% of Eos Energy Enterprises shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for ScanSource and Eos Energy Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ScanSource	0	1	1	1	3.00
Eos Energy Enterprises	1	7	2	0	2.10

ScanSource currently has a consensus target price of $42.00, indicating a potential downside of 4.78%. Eos Energy Enterprises has a consensus target price of $7.58, indicating a potential downside of 39.81%. Given ScanSource’s stronger consensus rating and higher probable upside, analysts clearly believe ScanSource is more favorable than Eos Energy Enterprises.

Profitability

This table compares ScanSource and Eos Energy Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ScanSource	2.35%	9.38%	4.87%
Eos Energy Enterprises	-3,049.55%	N/A	-270.01%

Summary

ScanSource beats Eos Energy Enterprises on 12 of the 15 factors compared between the two stocks.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.

About Eos Energy Enterprises

Eos Energy Enterprises, Inc. designs, manufactures, and markets zinc-based energy storage solutions for utility-scale, microgrid, and commercial and industrial (C&I) applications in the United States. The company offers Znyth technology battery energy storage system (BESS), which provides the operating flexibility to manage increased grid complexity and price volatility. Its flagship product is Gen 2.3 battery module. In addition, the company offers Z3 battery module that provides utilities, independent power producers, renewables developers, and C&I customers with an alternative to lithium-ion and lead-acid monopolar batteries for critical 3- to 12-hour discharge duration applications; battery management system, which provides a remote asset monitoring capability and service to track the performance and health of BESS and identify future system performance issues through predictive analytics; and project management and commissioning services, as well as long-term maintenance plans. Eos Energy Enterprises, Inc. is headquartered in Edison, New Jersey.