Analyzing TaskUs (NASDAQ:TASK) and Sterling Check (NASDAQ:STER)

TaskUs (NASDAQ:TASK) and Sterling Check (NASDAQ:STER) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current ratings and recommmendations for TaskUs and Sterling Check, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TaskUs	1	4	2	0	2.14
Sterling Check	0	4	1	0	2.20

TaskUs presently has a consensus price target of $16.43, suggesting a potential upside of 9.31%. Sterling Check has a consensus price target of $16.75, suggesting a potential upside of 0.06%. Given TaskUs’ higher possible upside, equities analysts plainly believe TaskUs is more favorable than Sterling Check.

Institutional and Insider Ownership

44.6% of TaskUs shares are owned by institutional investors. Comparatively, 84.3% of Sterling Check shares are owned by institutional investors. 29.3% of TaskUs 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares TaskUs and Sterling Check”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TaskUs	$924.36 million	1.45	$45.69 million	$0.59	25.47
Sterling Check	$719.64 million	2.28	-$120,000.00	($0.17)	-98.47

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

Risk & Volatility

TaskUs has a beta of 2.31, meaning that its share price is 131% 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 TaskUs and Sterling Check’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TaskUs	5.58%	17.73%	9.17%
Sterling Check	-2.07%	7.73%	3.94%

Summary

TaskUs beats Sterling Check on 11 of the 14 factors compared between the two stocks.

About TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.

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.