Critical Survey: TaskUs (NASDAQ:TASK) vs. Sterling Check (NASDAQ:STER)

Sterling Check (NASDAQ:STER) and TaskUs (NASDAQ:TASK) are both small-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of recent recommendations for Sterling Check and TaskUs, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sterling Check	0	4	1	0	2.20
TaskUs	1	4	2	0	2.14

Sterling Check presently has a consensus target price of $16.75, indicating a potential upside of 0.06%. TaskUs has a consensus target price of $16.43, indicating a potential upside of 7.94%. Given TaskUs’ higher probable upside, analysts clearly believe TaskUs is more favorable than Sterling Check.

Profitability

This table compares Sterling Check and TaskUs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sterling Check	-2.07%	7.73%	3.94%
TaskUs	5.58%	17.73%	9.17%

Insider & Institutional Ownership

84.3% of Sterling Check shares are owned by institutional investors. Comparatively, 44.6% of TaskUs shares are owned by institutional investors. 9.9% of Sterling Check shares are owned by insiders. Comparatively, 29.3% of TaskUs shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Sterling Check has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, TaskUs has a beta of 2.31, indicating that its stock price is 131% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sterling Check and TaskUs”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sterling Check	$719.64 million	2.28	-$120,000.00	($0.17)	-98.47
TaskUs	$924.36 million	1.47	$45.69 million	$0.59	25.80

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

Summary

TaskUs beats Sterling Check on 11 of the 14 factors compared between the two stocks.

About Sterling Check

Sterling Check Corp. provides technology-enabled background and identity verification services in the United States, Canada, Europe, the Middle East and Africa, and the Asia Pacific. The company offers identity verification services, such as telecom and device verification, identification document verification, facial recognition with biometric matching, social security number verification, and live video chat identification proofing; fingerprinting; background checks, including criminal record checks, sex offender registries, civil court records, motor vehicle and driving license records, executive investigations, credit reports, social media searches, and contingent workforce solutions; liens, judgments, and bankruptcies; and sanctions, risk, and compliance checks. It also provides credential verification services, which include employment verification, education verification, credential verification, professional reference checks, and department of transportation; drug and health screening; onboarding solutions, including Sterling I-9 that integrates a suite of screening and onboarding services and onboarding forms; and workforce, medical license, and motor vehicle records monitoring solutions. The company's services are delivered through its cloud-based technology platform that empowers organizations with real-time and data-driven insights to conduct and manage their employment screening programs. It serves a client base in a range of industries, such as healthcare, gig economy, financial and business services, industrials, retail, contingent, technology, media and entertainment, transportation and logistics, hospitality, education, and government. The company was formerly known as Sterling Ultimate Parent Corp. and changed its name to Sterling Check Corp. in August 2021. Sterling Check Corp. was founded in 1975 and is headquartered in Independence, Ohio.

About TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.