BlackLine (NASDAQ:BL – Get Free Report) and Stem (NYSE:STEM – Get Free Report) are both small-cap technology companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.
Profitability
This table compares BlackLine and Stem’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| BlackLine | 4.75% | 20.89% | 4.19% |
| Stem | -49.37% | N/A | -21.85% |
Earnings and Valuation
This table compares BlackLine and Stem”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| BlackLine | $700.43 million | 2.83 | $24.17 million | $0.57 | 59.81 |
| Stem | $148.03 million | 0.15 | $137.76 million | ($8.49) | -0.27 |
Stem has lower revenue, but higher earnings than BlackLine. Stem is trading at a lower price-to-earnings ratio than BlackLine, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
95.1% of BlackLine shares are held by institutional investors. Comparatively, 61.6% of Stem shares are held by institutional investors. 9.1% of BlackLine 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, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
BlackLine has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Stem has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for BlackLine and Stem, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| BlackLine | 3 | 6 | 5 | 0 | 2.14 |
| Stem | 1 | 4 | 1 | 0 | 2.00 |
BlackLine presently has a consensus price target of $39.50, suggesting a potential upside of 15.87%. Stem has a consensus price target of $6.54, suggesting a potential upside of 188.18%. Given Stem’s higher probable upside, analysts plainly believe Stem is more favorable than BlackLine.
Summary
BlackLine beats Stem on 11 of the 14 factors compared between the two stocks.
About BlackLine
BlackLine, Inc. operates a cloud-based software platform which is designed to transform accounting and finance operations for organizations of all types and sizes. Its scalable platform supports critical accounting processes such as the financial close, account reconciliations, intercompany accounting, and controls assurance. The company was founded by Therese Tucker in May 2001 and is headquartered in Woodland Hills, CA.
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.
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