Zeo Energy (NASDAQ:ZEO – Get Free Report) and Stem (NYSE:STEM – Get Free Report) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Risk & Volatility
Zeo Energy has a beta of -0.78, indicating that its share price is 178% less volatile than the S&P 500. Comparatively, Stem has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.
Insider and Institutional Ownership
61.6% of Stem shares are owned by institutional investors. 4.2% of Zeo Energy shares are owned by insiders. Comparatively, 10.2% of Stem shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Zeo Energy | -2.05% | -3.32% | -6.01% |
| Stem | -328.11% | -275.79% | -17.98% |
Earnings & Valuation
This table compares Zeo Energy and Stem”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zeo Energy | $110.07 million | 0.72 | -$3.00 million | ($1.39) | -1.15 |
| Stem | $144.58 million | 0.50 | -$140.41 million | ($5.26) | -0.08 |
Zeo Energy has higher earnings, but lower revenue 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.
Analyst Ratings
This is a breakdown of current ratings and price targets for Zeo Energy and Stem, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zeo Energy | 0 | 0 | 0 | 0 | 0.00 |
| Stem | 0 | 7 | 2 | 0 | 2.22 |
Stem has a consensus price target of $1.11, suggesting a potential upside of 154.84%. Given Stem’s stronger consensus rating and higher possible upside, analysts plainly believe Stem is more favorable than Zeo Energy.
Summary
Stem beats Zeo Energy on 8 of the 14 factors compared between the two stocks.
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.
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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