Stem (NYSE:STEM) and Wipro (NYSE:WIT) Financial Contrast

Wipro (NYSE:WIT) and Stem (NYSE:STEM) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Wipro	13.93%	15.40%	9.67%
Stem	94.16%	N/A	-21.16%

Analyst Recommendations

This is a summary of current ratings and price targets for Wipro and Stem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wipro	3	1	0	0	1.25
Stem	2	3	0	0	1.60

Wipro presently has a consensus price target of $1.70, indicating a potential downside of 8.85%. Stem has a consensus price target of $11.75, indicating a potential upside of 114.97%. Given Stem’s stronger consensus rating and higher probable upside, analysts plainly believe Stem is more favorable than Wipro.

Risk and Volatility

Wipro has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Stem has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Institutional & Insider Ownership

2.4% of Wipro shares are held by institutional investors. Comparatively, 61.6% of Stem shares are held by institutional investors. 1.0% of Wipro shares are held by company insiders. Comparatively, 5.1% of Stem shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Wipro and Stem”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wipro	$9.87 billion	1.98	$1.41 billion	$0.13	14.35
Stem	$156.27 million	0.31	$137.76 million	($8.70)	-0.63

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

Summary

Wipro beats Stem on 7 of the 13 factors compared between the two stocks.

About Wipro

Wipro Limited operates as an information technology (IT), consulting, and business process services company worldwide. It operates through IT Services and IT Products segments. The IT Services segment offers IT and IT-enabled services, including digital strategy advisory, customer-centric design, technology and IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure, business process, cloud, mobility and analytics, research and development, and hardware and software design services to enterprises. It serves customers in various industry sectors, such as communications, retail connectivity and services, consumer goods, healthcare, technology products and platforms, banking and financial services, energy, manufacturing and resources, capital markets and insurance, and hi-tech. The IT Products segment provides a range of third-party IT products comprising enterprise platforms, networking solutions, software and data storage products, contact center infrastructure, enterprise security, IT optimization technologies, video solutions, and end-user computing solutions. It serves enterprises in various industries primarily in the Indian market, which comprise the government, defense, IT and IT-enabled services, telecommunications, manufacturing, utilities, education, and financial services sectors. The company was incorporated in 1945 and is based in Bengaluru, India.

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.