Financial Comparison: Stem (NYSE:STEM) and TaskUs (NASDAQ:TASK)

TaskUs (NASDAQ:TASK) and Stem (NYSE:STEM) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Valuation & Earnings

This table compares TaskUs and Stem”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TaskUs	$1.18 billion	0.54	$102.28 million	$1.11	6.32
Stem	$156.27 million	0.58	$137.76 million	($9.48)	-1.12

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

Institutional and Insider Ownership

44.6% of TaskUs shares are held by institutional investors. Comparatively, 61.6% of Stem shares are held by institutional investors. 30.6% of TaskUs shares are held by company insiders. Comparatively, 5.1% 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 is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for TaskUs and Stem, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TaskUs	1	6	1	1	2.22
Stem	1	4	0	0	1.80

TaskUs presently has a consensus target price of $14.25, indicating a potential upside of 102.99%. Stem has a consensus target price of $15.75, indicating a potential upside of 48.03%. Given TaskUs’ stronger consensus rating and higher possible upside, equities research analysts clearly believe TaskUs is more favorable than Stem.

Profitability

This table compares TaskUs and Stem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TaskUs	8.64%	22.52%	12.29%
Stem	88.16%	N/A	-22.61%

Risk & Volatility

TaskUs has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500. Comparatively, Stem has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Summary

TaskUs beats Stem on 11 of the 15 factors compared between the two stocks.

About TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.

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.