Stem (NYSE:STEM) & Marchex (NASDAQ:MCHX) Critical Review

Stem (NYSE:STEM – Get Free Report) and Marchex (NASDAQ:MCHX – Get Free Report) are both small-cap technology companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Institutional and Insider Ownership

61.6% of Stem shares are held by institutional investors. Comparatively, 73.5% of Marchex shares are held by institutional investors. 5.1% of Stem shares are held by company insiders. Comparatively, 23.5% of Marchex shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Stem -49.37% N/A -21.85%
Marchex -12.44% -18.25% -13.94%

Analyst Ratings

This is a summary of recent ratings and target prices for Stem and Marchex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stem 1 3 1 0 2.00
Marchex 1 1 0 0 1.50

Stem currently has a consensus price target of $7.45, suggesting a potential upside of 74.23%. Given Stem’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Stem is more favorable than Marchex.

Risk and Volatility

Stem has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, Marchex has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Valuation and Earnings

This table compares Stem and Marchex”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stem $156.27 million 0.26 $137.76 million ($8.49) -0.50
Marchex $45.42 million 1.26 -$5.24 million ($0.12) -10.75

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

About Stem

(Get Free Report)

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.

About Marchex

(Get Free Report)

Marchex, Inc., a conversation intelligence company, provides conversational analytics and related solutions in the United States, Canada, and internationally. Its products include Marketing Edge that identifies which campaigns and channels are driving inbound conversations, evaluates what happens during those conversations, and closes the sales loop by connecting converted sales to marketing driven leads; Sonar Business Text Messaging, an artificial intelligence (AI) empowered intelligent workflow enabled mobile messaging solution that enables operations, sales, and marketing teams to communicate personally with field staff, prospects, and customers; Marchex Platform Services, a robust API-based conversation intelligence product that allows executives, sales, customer engagement, and marketing teams to apply Marchex AI to most any calls, regardless of communication platform, in order to identify actionable insights from conversations with their customers; Spotlight, an AI conversation analytics product for multi-location businesses; and Engage, a solution that provides locations with applications to enhance their overall performance. The company was incorporated in 2003 and is headquartered in Seattle, Washington.

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