Critical Comparison: StoneCo (NASDAQ:STNE) & BOX (NYSE:BOX)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BOX	10.35%	-24.19%	4.66%
StoneCo	23.82%	21.05%	4.17%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BOX	1	5	3	0	2.22
StoneCo	0	6	4	0	2.40

BOX presently has a consensus price target of $35.33, indicating a potential upside of 24.71%. StoneCo has a consensus price target of $14.59, indicating a potential upside of 32.84%. Given StoneCo’s stronger consensus rating and higher possible upside, analysts clearly believe StoneCo is more favorable than BOX.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BOX	$1.18 billion	3.33	$115.38 million	$0.65	43.59
StoneCo	$2.53 billion	1.08	$425.73 million	$2.50	4.39

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

Institutional & Insider Ownership

86.7% of BOX shares are owned by institutional investors. Comparatively, 73.2% of StoneCo shares are owned by institutional investors. 4.0% of BOX shares are owned by insiders. Comparatively, 11.3% of StoneCo shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

BOX has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, StoneCo has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.

Summary

StoneCo beats BOX on 10 of the 14 factors compared between the two stocks.

About BOX

Box, Inc. engages in the provision of an enterprise content platform that enables organizations to securely manage enterprise content while allowing easy, secure access and sharing of this content from anywhere, on any device. Its products include cloud content management, IT and admin controls, Box Governance, Box Zones, Box Relay, Box Shuttle, and Box KeySafe. The company was founded by Aaron Levie, Dylan Smith, Jeff Queisser, and Sam Ghods in March 2005 and is headquartered in Redwood City, CA.

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.