Head to Head Comparison: Flywire (NASDAQ:FLYW) vs. Steel Connect (NASDAQ:STCN)

Steel Connect (NASDAQ:STCN) and Flywire (NASDAQ:FLYW) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

47.3% of Steel Connect shares are held by institutional investors. Comparatively, 95.9% of Flywire shares are held by institutional investors. 8.7% of Steel Connect shares are held by insiders. Comparatively, 3.9% of Flywire shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Steel Connect has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Flywire has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Profitability

This table compares Steel Connect and Flywire’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Steel Connect	50.53%	14.59%	3.67%
Flywire	4.23%	2.49%	1.86%

Analyst Recommendations

This is a summary of current recommendations and price targets for Steel Connect and Flywire, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Steel Connect	0	0	0	0	0.00
Flywire	0	4	10	1	2.80

Flywire has a consensus price target of $25.29, indicating a potential upside of 20.47%. Given Flywire’s stronger consensus rating and higher probable upside, analysts plainly believe Flywire is more favorable than Steel Connect.

Earnings & Valuation

This table compares Steel Connect and Flywire”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Steel Connect	$174.11 million	0.44	$87.98 million	$3.07	3.94
Flywire	$403.09 million	6.48	-$8.57 million	$0.15	139.93

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

Summary

Flywire beats Steel Connect on 9 of the 15 factors compared between the two stocks.

About Steel Connect

Steel Connect, Inc., together with its subsidiaries, provides supply chain services in the United States, Mainland China, Netherlands, and internationally. It 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 tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services. The company provides fulfillment services comprising order management, pick, pack and ship, retail compliance, and demand planning services; and reverse logistics services that simplifies the returns process for retailers and manufacturers, as well as operates a cloud-based e-commerce platform. In addition, it offers warehousing and inventory management services; and software licenses, maintenance, and support services. Further, the company offers its supply chain services to customers in the consumer electronics, communications, computing, medical devices, software, and retail markets. 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 New York, New York.

About Flywire

Flywire Corporation, together with its subsidiaries, operates as a payments enablement and software company in the United States and internationally. Its payment platform and network, and vertical-specific software help clients to get paid and help their customers to pay. The company’s platform facilitates payment flows across multiple currencies, payment types, and payment options, as well as provides direct connections to alternative payment methods, such as Alipay, Boleto, PayPal/Venmo, and Trustly. It serves education, healthcare, travel, and business to business organizations. The company was formerly known as peerTransfer Corporation and changed its name to Flywire Corporation in December 2016. Flywire Corporation was incorporated in 2009 and is headquartered in Boston, Massachusetts.