Stem (NYSE:STEM – Get Free Report) and Zeo Energy (NASDAQ:ZEO – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.
Valuation and Earnings
This table compares Stem and Zeo Energy”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stem | $144.58 million | 0.50 | -$140.41 million | ($5.26) | -0.08 |
| Zeo Energy | $110.07 million | 0.72 | -$3.00 million | ($1.39) | -1.15 |
Zeo Energy has lower revenue, but higher earnings than Stem. Zeo Energy is trading at a lower price-to-earnings ratio than Stem, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Profitability
This table compares Stem and Zeo Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stem | -328.11% | -275.79% | -17.98% |
| Zeo Energy | -2.05% | -3.32% | -6.01% |
Analyst Recommendations
This is a summary of recent ratings for Stem and Zeo Energy, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stem | 0 | 7 | 2 | 0 | 2.22 |
| Zeo Energy | 0 | 0 | 0 | 0 | 0.00 |
Stem presently has a consensus target price of $1.11, suggesting a potential upside of 154.84%. Given Stem’s stronger consensus rating and higher possible upside, analysts clearly believe Stem is more favorable than Zeo Energy.
Insider & Institutional Ownership
61.6% of Stem shares are owned by institutional investors. 10.2% of Stem shares are owned by insiders. Comparatively, 4.2% of Zeo Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Stem beats Zeo Energy on 8 of the 14 factors compared between the two stocks.
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.
About Zeo Energy
Zeo Energy Corp. provides residential solar energy systems, other energy efficient equipment, and related services in Florida, Texas, Arkansas, and Missouri, the United States. The company is involved in the selling and installing of residential solar energy systems that homeowners use electricity required to power their homes. Its residential solar energy systems comprise solar panels, inverters, and racking systems. It also offers insulation services, such as adding insulation to a home's attic or walls; energy efficiency equipment, including hybrid electric water heaters and swimming pool pumps; battery-based energy storage systems; and roofing services. Zeo Energy Corp. was founded in 2005 and is headquartered in New Port Richey, Florida.
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