Critical Comparison: Stoneridge (NYSE:SRI) vs. ECARX (NASDAQ:ECX)

Stoneridge (NYSE:SRI) and ECARX (NASDAQ:ECX) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, institutional ownership and profitability.

Volatility and Risk

Stoneridge has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, ECARX has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares Stoneridge and ECARX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stoneridge	-15.64%	-24.91%	-8.33%
ECARX	-2.25%	N/A	-2.75%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Stoneridge and ECARX, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stoneridge	1	2	0	0	1.67
ECARX	1	1	0	0	1.50

Stoneridge presently has a consensus price target of $16.00, suggesting a potential upside of 126.31%. Given Stoneridge’s stronger consensus rating and higher probable upside, analysts clearly believe Stoneridge is more favorable than ECARX.

Valuation & Earnings

This table compares Stoneridge and ECARX”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stoneridge	$861.26 million	0.23	-$102.83 million	($4.26)	-1.66
ECARX	$847.90 million	0.47	-$66.04 million	($0.05)	-22.40

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

Insider and Institutional Ownership

98.1% of Stoneridge shares are held by institutional investors. 11.0% of Stoneridge shares are held by insiders. Comparatively, 20.0% of ECARX shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

ECARX beats Stoneridge on 7 of the 13 factors compared between the two stocks.

About Stoneridge

Stoneridge, Inc., together with its subsidiaries, designs and manufactures engineered electrical and electronic systems, components, and modules for the automotive, commercial, off-highway, motorcycle, and agricultural vehicle markets in North America, South America, Europe, and internationally. The company operates through three segments: Control Devices, Electronics, and Stoneridge Brazil. The Control Devices segment offers actuators, sensors, switches, actuators, and connectors that monitor, measure, or activate specific functions within a vehicle. The Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products, and electronic control units. Its products collect, store, and display vehicle information, such as speed, pressure, maintenance data, trip information, operator performance, temperature, distance traveled, and driver messages related to vehicle performance. This segment also offers electronic control units that regulate, coordinate, monitor, and direct the operation of the electrical system within a vehicle. The Stoneridge Brazil segment designs, manufactures, and sells vehicle tracking devices and monitoring services; vehicle security alarms and convenience accessories, including parking sensors and rearview cameras; in-vehicle audio and infotainment devices; and driver information systems and telematics solutions. The company provides its products and systems to various original equipment manufacturers and tier 1 customers, as well as aftermarket distributors. Stoneridge, Inc. was founded in 1965 and is headquartered in Novi, Michigan.

About ECARX

ECARX Holdings Inc. develops a full stack automotive computing platform to shape the interaction between people and cars by rapidly advancing the technology by smart mobility worldwide. It offers system on chips, central computing platforms, operating systems, and software. Its core products include infotainment head units, digital cockpits, vehicle chip-set solutions, core operating system, and integrated software stack. The company has entered into a strategic partnership agreement with Black Sesame Technologies. The company is based in Shanghai, the People's Republic of China.