Head-To-Head Comparison: Stem (NYSE:STEM) and ExlService (NASDAQ:EXLS)

ExlService (NASDAQ:EXLS) and Stem (NYSE:STEM) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.

Valuation and Earnings

This table compares ExlService and Stem”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ExlService	$1.84 billion	3.68	$198.30 million	$1.47	29.01
Stem	$144.58 million	1.09	-$854.01 million	($13.63)	-1.38

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

Risk and Volatility

ExlService has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Stem has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ExlService	11.91%	25.60%	15.03%
Stem	62.20%	N/A	-21.71%

Insider & Institutional Ownership

92.9% of ExlService shares are held by institutional investors. Comparatively, 61.6% of Stem shares are held by institutional investors. 4.0% of ExlService shares are held by insiders. Comparatively, 10.2% of Stem shares are held by 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for ExlService and Stem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ExlService	0	1	4	0	2.80
Stem	1	5	0	0	1.83

ExlService currently has a consensus price target of $53.00, indicating a potential upside of 24.30%. Stem has a consensus price target of $17.60, indicating a potential downside of 6.46%. Given ExlService’s stronger consensus rating and higher possible upside, analysts clearly believe ExlService is more favorable than Stem.

Summary

ExlService beats Stem on 11 of the 14 factors compared between the two stocks.

About ExlService

ExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. The company operates through Insurance, Healthcare, Analytics, and Emerging Business segments. It also provides digital operations and solutions and analytics-driven services, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. In addition, the company offers health care services related to care management, utilization management, disease management, payment integrity, revenue optimization, and customer engagement. Further, it provides financial planning and analysis, management reporting, forecasting and decision support, data management, regulatory reporting and risk, and compliance services; reservations, customer, and fulfilment services; freight billing, collections, claims management, freight audit, freight scheduling, supply chain management, and revenue assurance services; residential mortgage lending, title verification and validation, retail banking and credit cards, trust verification, commercial banking, and investment management; merchandising, pricing, and demand forecasting; and digital operations and solutions. The company offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management. ExlService Holdings, Inc. was founded in 1999 and is headquartered in New York, New York.

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.