Analyzing StoneCo (NASDAQ:STNE) & Brightcove (NASDAQ:BCOV)

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

Insider & Institutional Ownership

43.2% of StoneCo shares are held by institutional investors. Comparatively, 77.0% of Brightcove shares are held by institutional investors. 1.9% of Brightcove shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for StoneCo and Brightcove, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
StoneCo 1 3 6 0 2.50
Brightcove 0 0 2 0 3.00

StoneCo currently has a consensus price target of $35.13, indicating a potential upside of 12.98%. Brightcove has a consensus price target of $13.00, indicating a potential upside of 20.15%. Given Brightcove’s stronger consensus rating and higher probable upside, analysts clearly believe Brightcove is more favorable than StoneCo.

Profitability

This table compares StoneCo and Brightcove’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
StoneCo 27.40% 10.16% 3.64%
Brightcove -10.70% -12.20% -5.84%

Valuation & Earnings

This table compares StoneCo and Brightcove’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
StoneCo $414.74 million 20.77 $82.42 million $0.33 94.21
Brightcove $164.83 million 2.51 -$14.03 million ($0.27) -40.07

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

Summary

StoneCo beats Brightcove on 9 of the 13 factors compared between the two stocks.

StoneCo Company Profile

StoneCo Ltd. engages in the provision of financial technology solutions. It caters to merchants and partners that conduct electronic commerce across in-store, online, and mobile channels. It offers cloud-based technology platform, electronic payments, and automation of business processes at the point-of-sale. The company was founded on March 11, 2014 and is headquartered in São Paulo, Brazil.

Brightcove Company Profile

Brightcove Inc. provides cloud-based services for video. It offers Video Cloud, an online video platform that enables its customers to publish and distribute video to Internet-connected devices. The company also provides Zencoder, a cloud-based video encoding service for file support, quality and control, speed and reliability, platform and security, and account and integration; SSAI, a cloud-based ad insertion and video stitching service; and Player, a cloud-based service for creating and managing video player experiences. In addition, it offers Video Marketing Suite, a suite of video technologies to address the needs of marketers to drive awareness, engagement, and conversion; OTT Flow, a service for media companies and content owners to deploy direct-to-consumer, live and on-demand video services across platforms; and Enterprise video suite, an enterprise-class platform for internal communications, employee training, live streaming, marketing, and e-commerce videos. Further, the company provides account management, professional, support, and online and onsite training services. It serves media companies, broadcasters, publishers, sports and entertainment companies, fashion and hospitality brands and corporations, faith-based institutions, e-commerce platforms, and hi-tech organizations; and governments, educational institutions, and non-profit organizations through direct sales, referral partners, channel partners, and resellers in North America, Europe, Japan, the Asia Pacific, and internationally, as well as sells its products online. The company was formerly known as Video Marketplace, Inc. and changed its name to Brightcove Inc. in March 2005. Brightcove Inc. was founded in 2004 and is headquartered in Boston, Massachusetts.

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