Critical Survey: Stem (NYSE:STEM) & Dynatrace (NYSE:DT)

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

Volatility and Risk

Stem has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Dynatrace has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stem	$144.58 million	0.85	-$854.01 million	($28.99)	-0.51
Dynatrace	$1.70 billion	8.56	$483.68 million	$1.63	29.58

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

Institutional & Insider Ownership

61.6% of Stem shares are held by institutional investors. Comparatively, 94.3% of Dynatrace shares are held by institutional investors. 5.1% of Stem shares are held by company insiders. Comparatively, 0.6% of Dynatrace shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Stem and Dynatrace, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stem	0	7	0	0	2.00
Dynatrace	0	6	15	1	2.77

Stem currently has a consensus price target of $10.4286, indicating a potential downside of 29.58%. Dynatrace has a consensus price target of $62.5652, indicating a potential upside of 29.78%. Given Dynatrace’s stronger consensus rating and higher possible upside, analysts plainly believe Dynatrace is more favorable than Stem.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Stem	-14.04%	N/A	-21.90%
Dynatrace	27.75%	9.15%	6.00%

Summary

Dynatrace beats Stem on 13 of the 15 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 Dynatrace

Dynatrace, Inc. provides a security platform for multicloud environments in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates Dynatrace, a security platform, which provides application and microservices monitoring, runtime application security, infrastructure monitoring, log management and analytics, digital experience monitoring, digital business analytics, and cloud automation. Its platform allows its customers to modernize and automate IT operations, delivers software, and enhance user experiences. In addition, the company offers implementation, consulting, and training services. It markets its products through a combination of direct sales team and a network of partners, including resellers, system integrators, and managed service providers. It serves customers in various industries comprising banking, financial services, government, insurance, retail and wholesale, transportation, and software. Dynatrace, Inc. was founded in 2005 and is headquartered in Waltham, Massachusetts.