StoneCo (NASDAQ:STNE – Get Free Report) and Sterling Check (NASDAQ:STER – Get Free Report) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.
Profitability
This table compares StoneCo and Sterling Check’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| StoneCo | 16.02% | 13.92% | 4.09% |
| Sterling Check | -2.07% | 7.73% | 3.94% |
Valuation & Earnings
This table compares StoneCo and Sterling Check”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| StoneCo | $2.41 billion | 1.17 | $318.89 million | $1.28 | 7.12 |
| Sterling Check | $719.64 million | 2.28 | -$120,000.00 | ($0.17) | -98.47 |
Volatility and Risk
StoneCo has a beta of 2.29, suggesting that its stock price is 129% more volatile than the S&P 500. Comparatively, Sterling Check has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.
Institutional & Insider Ownership
73.2% of StoneCo shares are held by institutional investors. Comparatively, 84.3% of Sterling Check shares are held by institutional investors. 9.9% of Sterling Check shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for StoneCo and Sterling Check, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| StoneCo | 1 | 1 | 7 | 1 | 2.80 |
| Sterling Check | 0 | 4 | 1 | 0 | 2.20 |
StoneCo currently has a consensus price target of $16.89, indicating a potential upside of 85.39%. Sterling Check has a consensus price target of $16.75, indicating a potential upside of 0.06%. Given StoneCo’s stronger consensus rating and higher possible upside, analysts clearly believe StoneCo is more favorable than Sterling Check.
Summary
StoneCo beats Sterling Check on 12 of the 15 factors compared between the two stocks.
About StoneCo
StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.
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.
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