Contrasting Steel Connect (STCN) & The Competition

Steel Connect (NASDAQ: STCN) is one of 120 publicly-traded companies in the “Business services, not elsewhere classified” industry, but how does it weigh in compared to its peers? We will compare Steel Connect to related businesses based on the strength of its analyst recommendations, dividends, earnings, institutional ownership, risk, valuation and profitability.

Analyst Ratings

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This is a summary of current ratings and target prices for Steel Connect and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Steel Connect 0 1 0 0 2.00
Steel Connect Competitors 700 3547 6933 271 2.59

Steel Connect currently has a consensus price target of $8.00, indicating a potential upside of 296.04%. As a group, “Business services, not elsewhere classified” companies have a potential upside of 7.31%. Given Steel Connect’s higher probable upside, analysts clearly believe Steel Connect is more favorable than its peers.

Profitability

This table compares Steel Connect and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Steel Connect 10.02% -40.08% -7.54%
Steel Connect Competitors 5.47% -51.29% 2.37%

Institutional & Insider Ownership

20.9% of Steel Connect shares are owned by institutional investors. Comparatively, 61.8% of shares of all “Business services, not elsewhere classified” companies are owned by institutional investors. 8.7% of Steel Connect shares are owned by company insiders. Comparatively, 16.3% of shares of all “Business services, not elsewhere classified” companies 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.

Valuation & Earnings

This table compares Steel Connect and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Steel Connect $436.62 million -$25.82 million N/A
Steel Connect Competitors $2.38 billion $315.29 million 13.22

Steel Connect’s peers have higher revenue and earnings than Steel Connect.

Volatility and Risk

Steel Connect has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Steel Connect’s peers have a beta of 0.66, suggesting that their average stock price is 34% less volatile than the S&P 500.

Summary

Steel Connect peers beat Steel Connect on 9 of the 12 factors compared.

Steel Connect Company Profile

Steel Connect, Inc., through its subsidiaries, provides supply chain and logistics services to the consumer electronics, communications, computing, medical devices, software, storage, retail, and other industries. It operates through four segments: Americas, Asia, Europe, and e-Business. The company offers material planning and factory supply solutions, including sourcing and delivering inbound materials, kitting and assembly of packaging materials and accessories, and managing logistics and delivery schedules into multiple manufacturing sites or partners; and value-added warehousing and distribution services, such as order management, pick, pack, ship, retail connectivity, demand planning, and integrated transportation management services, as well as solutions for the physical programming of digital content comprising software, firmware, upgrades, or promotional material onto various types of flash media. It also provides aftermarket services that include product returns management services for simplifying the returns process for retailers and manufacturers; and product repair and recovery services for clients to enhance the value of returned and excess inventory. In addition, the company offers e-business solutions, which comprise e-commerce, contact center, and financial management solutions, as well as entitlement management solution that uses a software platform, which enables clients to manage access to digital and multimedia products, content, features, and services. The company was formerly known as ModusLink Global Solutions, Inc. and changed its name to Steel Connect, Inc. in February 2018. Steel Connect, Inc. was founded in 1986 and is headquartered in Waltham, Massachusetts.

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