Datasea (NASDAQ:DTSS – Get Free Report) and Stem (NYSE:STEM – Get Free Report) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.
Institutional and Insider Ownership
82.1% of Datasea shares are held by institutional investors. Comparatively, 61.6% of Stem shares are held by institutional investors. 50.7% of Datasea shares are held by company insiders. Comparatively, 10.2% of Stem shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Datasea and Stem’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Datasea | -5.17% | -110.80% | -53.06% |
| Stem | 62.20% | N/A | -21.71% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Datasea | 1 | 0 | 0 | 0 | 1.00 |
| Stem | 1 | 7 | 0 | 0 | 1.88 |
Stem has a consensus target price of $14.57, indicating a potential downside of 12.40%. Given Stem’s stronger consensus rating and higher possible upside, analysts plainly believe Stem is more favorable than Datasea.
Earnings and Valuation
This table compares Datasea and Stem”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Datasea | $71.62 million | 0.17 | -$5.09 million | ($0.89) | -1.64 |
| Stem | $144.58 million | 0.97 | -$854.01 million | ($13.63) | -1.22 |
Datasea has higher earnings, but lower revenue than Stem. Datasea is trading at a lower price-to-earnings ratio than Stem, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Datasea has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Stem has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.
Summary
Stem beats Datasea on 9 of the 13 factors compared between the two stocks.
About Datasea
Datasea Inc., through its subsidiaries, provides technology and information systems in the People's Republic of China. The company provides smart city solutions and 5G messaging applications. It also offers its smart security solutions primarily to schools, tourist or scenic attractions, and public communities. In addition, the company provides intelligent acoustics products, which include ultrasonic air sterilizer, air purification and deodorization, and other products. The company was formerly known as Rose Rock, Inc. and changed its name to Datasea Inc. in October 2015. Datasea Inc. was incorporated in 2014 and is headquartered in Beijing, the People's Republic of China.
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.
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