Steel Connect (NASDAQ:STCN) and LendingClub (NYSE:LC) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.
Valuation & Earnings
This table compares Steel Connect and LendingClub’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Steel Connect | $645.26 million | 0.17 | $36.71 million | N/A | N/A |
| LendingClub | $574.54 million | 2.64 | -$153.83 million | ($0.17) | -20.94 |
Steel Connect has higher revenue and earnings than LendingClub.
Profitability
This table compares Steel Connect and LendingClub’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Steel Connect | 5.23% | -16.25% | -2.25% |
| LendingClub | -30.89% | -4.02% | -0.88% |
Insider & Institutional Ownership
51.3% of Steel Connect shares are held by institutional investors. Comparatively, 88.4% of LendingClub shares are held by institutional investors. 8.7% of Steel Connect shares are held by company insiders. Comparatively, 4.0% of LendingClub shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Steel Connect and LendingClub, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Steel Connect | 0 | 0 | 0 | 0 | N/A |
| LendingClub | 0 | 5 | 3 | 0 | 2.38 |
LendingClub has a consensus price target of $5.39, indicating a potential upside of 51.48%. Given LendingClub’s higher probable upside, analysts clearly believe LendingClub is more favorable than Steel Connect.
Volatility & Risk
Steel Connect has a beta of -0.04, suggesting that its stock price is 104% less volatile than the S&P 500. Comparatively, LendingClub has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.
Summary
LendingClub beats Steel Connect on 7 of the 11 factors compared between the two stocks.
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 five segments: Americas, Asia, Europe, Direct Marketing, and e-Business. The company offers product configuration and packaging, kitting, and assembly of components and parts into finished goods; and value-added processes, such as product testing, radio frequency identification (RFID) tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services. It also provides fulfillment services, including order management, pick, pack and ship, retail compliance, and demand planning services; and content protection and activation, and IP security services, as well as optimizes component and finished goods inventory levels. In addition, it offers operates a cloud-based e-commerce platform, which online buying experience so that products can be purchased, serviced, and delivered worldwide; and provides reverse logistics services that simplifies the returns process for retailers and manufacturers to improve service parts management and the value of returned assets. Further, the company offers EZ Connect service, which provides essential fulfillment capabilities for emerging growth companies without the expensive surprises associated with third-party fulfillment services; and direct marketing services comprising end-to-end services for paper-based direct marketing and omnichannel marketing campaign 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 incorporated in 1986 and is headquartered in Waltham, Massachusetts.
LendingClub Company Profile
LendingClub Corporation operates an online marketplace platform that connects borrowers and investors in the United States. Its marketplace facilitates various types of loan products for consumers and small businesses, including unsecured personal loans, unsecured education and patient finance loans, auto refinance loans, and unsecured small business loans. The company also provides an opportunity to the investors to invest in a range of loans based on term and credit. LendingClub Corporation was founded in 2006 and is headquartered in San Francisco, California.
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