StoneCo (NASDAQ:STNE) vs. Sterling Check (NASDAQ:STER) Head-To-Head Survey

StoneCo (NASDAQ:STNE) and Sterling Check (NASDAQ:STER) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Risk & Volatility

StoneCo has a beta of 2.29, meaning that its share price is 129% more volatile than the S&P 500. Comparatively, Sterling Check has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

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 and Earnings

This table compares StoneCo and Sterling Check”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StoneCo	$2.41 billion	1.31	$318.89 million	$1.28	8.02
Sterling Check	$719.64 million	2.28	-$120,000.00	($0.17)	-98.47

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

Institutional & Insider Ownership

73.2% of StoneCo shares are owned by institutional investors. Comparatively, 84.3% of Sterling Check shares are owned by institutional investors. 11.3% of StoneCo shares are owned by company insiders. Comparatively, 9.9% of Sterling Check shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for StoneCo and Sterling Check, as reported 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 target price of $16.89, indicating a potential upside of 64.61%. Sterling Check has a consensus target price of $16.75, indicating a potential upside of 0.06%. Given StoneCo’s stronger consensus rating and higher probable upside, analysts clearly believe StoneCo is more favorable than Sterling Check.

Summary

StoneCo beats Sterling Check on 13 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.