Financial Survey: StoneCo (NASDAQ:STNE) versus Perfect (NYSE:PERF)

Perfect (NYSE:PERF) and StoneCo (NASDAQ:STNE) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Perfect and StoneCo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perfect	1	0	0	0	1.00
StoneCo	1	4	7	0	2.50

StoneCo has a consensus price target of $17.50, indicating a potential upside of 27.55%. Given StoneCo’s stronger consensus rating and higher possible upside, analysts clearly believe StoneCo is more favorable than Perfect.

Insider & Institutional Ownership

73.2% of StoneCo shares are owned by institutional investors. 44.7% of Perfect shares are owned by company insiders. Comparatively, 11.3% of StoneCo shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Perfect and StoneCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perfect	6.71%	2.42%	1.92%
StoneCo	15.38%	21.55%	4.30%

Valuation and Earnings

This table compares Perfect and StoneCo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perfect	$69.15 million	N/A	$4.64 million	$0.05	29.00
StoneCo	$2.53 billion	1.55	-$280.92 million	$1.53	8.97

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

Volatility & Risk

Perfect has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500. Comparatively, StoneCo has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Summary

StoneCo beats Perfect on 10 of the 13 factors compared between the two stocks.

About Perfect

Perfect Corp. is a software as a service technology company, which engages in the business of developing makeup virtual try-on solutions. Its solutions include virtual try-ons for makeup, nail art, hairstyles, beard dye and styling, eyewear, jewelry, advanced skin diagnostic technology, foundation shade finder, and interactive artificial reality makeup application tutorial platform. Its brands include Estée Lauder, Clinique, MAC, e.l.e., benefit, Sally Hansen, Belcorp, Decorté, NARS, Aveda, Madisonreed, kate, Sofina iP, Jillstuart, Cosnova, Beekman, Marianna, Ardell, tarte, and Coffret D’or. It operates through the following geographical segments: United States, Japan, France, and Others. The company was founded by Alice H. Chang on February 13, 2015 and is headquartered in New Taipei, Taiwan.

About StoneCo

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.