TD Cowen analyst Thomas Boyes maintained a Hold rating on Stem Inc (STEM – Research Report) today and set a price target of $0.50.
Thomas Boyes has given his Hold rating due to a combination of factors that reflect both positive developments and some concerns for Stem Inc. On the positive side, the company is making strides with its software-led strategy, as evidenced by new operating metrics that enhance business visibility and recent successes with its PowerTrack platform. These factors, along with anticipated cost savings and improved revenue visibility, suggest that Stem is on a promising path.
However, Boyes also notes some reservations, particularly regarding the company’s FY25 guidance, which fell short of market expectations. This shortfall is attributed to lower anticipated battery hardware resale revenues, although the focus on more profitable software and services is expected to enhance gross margins. Overall, while there are encouraging signs of progress, the mixed outlook justifies a Hold rating as the company navigates these challenges.