Reviewing Stem (NYSE:STEM) and BigBear.ai (NYSE:BBAI)

Stem (NYSE:STEM) and BigBear.ai (NYSE:BBAI) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Analyst Ratings

This is a summary of recent recommendations for Stem and BigBear.ai, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stem	2	4	0	0	1.67
BigBear.ai	1	2	1	0	2.00

Stem currently has a consensus price target of $17.60, indicating a potential upside of 57.99%. BigBear.ai has a consensus price target of $6.00, indicating a potential upside of 53.49%. Given Stem’s higher possible upside, equities research analysts clearly believe Stem is more favorable than BigBear.ai.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Stem	62.20%	N/A	-21.71%
BigBear.ai	-274.70%	-26.11%	-12.37%

Volatility & Risk

Stem has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, BigBear.ai has a beta of 3.45, indicating that its stock price is 245% more volatile than the S&P 500.

Valuation and Earnings

This table compares Stem and BigBear.ai”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stem	$164.95 million	0.57	-$854.01 million	($13.63)	-0.82
BigBear.ai	$144.20 million	11.83	-$295.55 million	($1.42)	-2.75

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

Institutional and Insider Ownership

61.6% of Stem shares are owned by institutional investors. Comparatively, 7.6% of BigBear.ai shares are owned by institutional investors. 10.2% of Stem shares are owned by insiders. Comparatively, 0.5% of BigBear.ai 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.

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 BigBear.ai

BigBear.ai Holdings, Inc. provides artificial intelligence-powered decision intelligence solutions. It offers national security, supply chain management, and digital identity and biometrics solutions. The company also provides data ingestion, data enrichment, data processing, artificial intelligence, machine learning, predictive analytics, and predictive visualization solutions and services. It serves nation defense and intelligence agencies, border protection, transportation security, manufacturing, distribution and logistics, travel, entertainment, and tourism sectors. The company is headquartered in Columbia, Maryland.