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SThree PLC (GB:STEM)
LSE:STEM

SThree plc (STEM) AI Stock Analysis

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GB:STEM

SThree plc

(LSE:STEM)

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Outperform 75 (OpenAI - 4o)
Rating:75Outperform
Price Target:
188.00p
▲(2.51% Upside)
SThree plc's overall stock score is driven by strong valuation metrics and positive corporate events. The financial performance is stable but challenged by declining revenue and cash flow. Technical indicators show bullish momentum, supporting a positive outlook.
Positive Factors
Business Model Strength
SThree's focus on STEM sectors and its recruitment expertise provide a durable business model, leveraging specialized knowledge to maintain client relationships and revenue stability.
Balance Sheet Health
Low leverage and a healthy equity ratio suggest financial stability, allowing SThree to navigate market fluctuations and invest in growth opportunities without excessive financial strain.
Global Presence
SThree's global operations and diverse client base reduce dependency on any single market, enhancing resilience and enabling the company to capitalize on international growth opportunities.
Negative Factors
Declining Revenue
The decline in revenue suggests challenges in maintaining market share or pricing power, potentially impacting long-term growth and profitability if not addressed.
Declining Free Cash Flow
A significant drop in free cash flow indicates potential operational inefficiencies or increased costs, which could limit the company's ability to invest in growth or return capital to shareholders.
Revenue Growth Concerns
The ongoing decline in revenue growth raises concerns about SThree's ability to sustain its market position and adapt to competitive pressures, potentially affecting long-term strategic goals.

SThree plc (STEM) vs. iShares MSCI United Kingdom ETF (EWC)

SThree plc Business Overview & Revenue Model

Company DescriptionSThree plc is a global recruitment company specializing in STEM (Science, Technology, Engineering, and Mathematics) sectors. Founded in 1986, the company operates across various regions, including Europe, North America, and Asia-Pacific, providing a range of recruitment services. SThree focuses on connecting skilled professionals with leading companies in industries such as technology, engineering, life sciences, and finance. Its core products and services include permanent and contract recruitment, talent management, and workforce solutions tailored to meet the specific needs of its clients.
How the Company Makes MoneySThree generates revenue primarily through recruitment fees, which are charged to clients for successfully placing candidates in permanent or temporary positions. The company has a diverse revenue model that includes fees from both contract and permanent placements, with contract recruitment typically providing a more stable revenue stream due to ongoing placements and renewals. Additionally, SThree may earn revenues from consulting services and talent management solutions. Key partnerships with various organizations in the STEM sectors enhance its recruitment capabilities and drive earnings, allowing SThree to leverage its extensive network and industry expertise to match qualified candidates with suitable employers effectively.

SThree plc Financial Statement Overview

Summary
SThree plc demonstrates a stable financial position with low leverage and reasonable profitability. However, declining revenue and free cash flow raise concerns about future growth prospects. The company needs to address these issues to sustain its financial health and improve its performance metrics.
Income Statement
68
Positive
SThree plc has shown a mixed performance in its income statement. The gross profit margin for the latest period is approximately 24.73%, with a net profit margin of 3.33%. However, both revenue and net income have declined compared to the previous year, with a revenue decrease of about 10.24%. The EBIT margin stands at 4.43%, and the EBITDA margin is 4.69%, indicating reasonable operational efficiency. While the margins suggest stability, the declining revenue trend poses a concern.
Balance Sheet
75
Positive
The balance sheet of SThree plc reflects a solid financial position with a debt-to-equity ratio of 0.16, indicating low leverage. The equity ratio is 49.06%, which suggests a healthy proportion of equity financing. Return on equity is modest at 19.98%, reflecting moderate profitability. Overall, the company appears financially stable with manageable debt levels.
Cash Flow
62
Positive
The cash flow statement shows a decline in free cash flow by approximately 51.58% from the previous year, which is concerning. The operating cash flow to net income ratio is 0.80, indicating a decent conversion of net income into cash flow. However, the free cash flow to net income ratio is 0.66, which could be improved. The cash flow situation reflects some operational challenges and needs attention.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.38B1.49B1.66B1.64B1.33B1.20B
Gross Profit339.40M369.08M418.77M411.71M338.00M289.50M
EBITDA43.09M84.34M94.53M96.59M78.74M50.95M
Net Income28.79M49.69M56.05M54.20M41.98M16.95M
Balance Sheet
Total Assets443.28M506.73M472.30M470.44M400.63M338.39M
Cash, Cash Equivalents and Short-Term Investments47.88M69.76M83.20M65.81M57.53M50.36M
Total Debt43.55M39.87M29.02M34.13M35.09M35.97M
Total Liabilities227.01M258.08M249.42M270.05M242.48M209.87M
Stockholders Equity216.26M248.64M222.88M200.39M158.15M128.52M
Cash Flow
Free Cash Flow18.09M32.85M67.83M41.26M34.27M60.74M
Operating Cash Flow24.98M39.68M76.04M44.93M36.92M66.02M
Investing Cash Flow-12.69M-13.17M-8.21M-3.67M-2.65M-5.28M
Financing Cash Flow-55.33M-39.92M-52.15M-38.54M-24.97M-21.59M

SThree plc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price183.40
Price Trends
50DMA
160.44
Positive
100DMA
169.23
Positive
200DMA
200.74
Negative
Market Momentum
MACD
5.58
Negative
RSI
76.24
Negative
STOCH
86.12
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:STEM, the sentiment is Positive. The current price of 183.4 is above the 20-day moving average (MA) of 167.54, above the 50-day MA of 160.44, and below the 200-day MA of 200.74, indicating a neutral trend. The MACD of 5.58 indicates Negative momentum. The RSI at 76.24 is Negative, neither overbought nor oversold. The STOCH value of 86.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:STEM.

SThree plc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
£233.00M8.4112.99%6.36%-13.93%-48.74%
71
Outperform
£52.78M13.8744.68%1.44%
71
Outperform
£29.00M12.906.45%3.26%2.40%1101.69%
64
Neutral
£731.45M61.114.81%7.39%-12.54%-76.55%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
53
Neutral
£85.51M-5.82-11.22%12.88%-14.31%-361.93%
46
Neutral
£871.53M-111.02-1.52%2.28%-4.92%-58.06%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:STEM
SThree plc
186.00
-65.68
-26.10%
GB:GATC
Gattaca
92.00
9.83
11.96%
GB:HAS
Hays plc
54.40
-22.38
-29.15%
GB:PAGE
PageGroup
230.80
-81.86
-26.18%
GB:RWA
Robert Walters
131.00
-171.71
-56.72%
GB:STAF
Staffline
45.90
23.25
102.65%

SThree plc Corporate Events

Regulatory Filings and Compliance
SThree plc Announces Total Voting Rights Update
Neutral
Dec 1, 2025

SThree plc has announced its total voting rights as of November 30, 2025, which consist of 127,822,300 voting rights. This information is crucial for shareholders to determine their reporting obligations under the Financial Conduct Authority’s rules, potentially impacting their investment decisions and the company’s shareholder dynamics.

Executive/Board ChangesBusiness Operations and Strategy
SThree Chair Appointed to HBX Group Leadership
Positive
Nov 26, 2025

SThree plc has announced that its non-executive Chair, James Bilefield, has been appointed as a non-executive director and Chair designate of HBX Group International plc. This strategic move is expected to strengthen SThree’s leadership presence and influence in the market, as HBX Group is listed on the Spanish Stock Exchange, potentially offering new opportunities and collaborations.

Executive/Board Changes
SThree plc Announces New Non-Executive Director Appointment
Neutral
Nov 26, 2025

SThree plc has announced the appointment of Rosie Shapland as an Independent Non-Executive Director, effective 27 November 2025. Rosie, with over 30 years of audit experience and a background in chairing audit and risk committees for UK-listed companies, will bring significant expertise in accounting, financial reporting, and governance to SThree. She will succeed Elaine O’Donnell as Chair of the Audit and Risk Committee following Elaine’s resignation due to other business commitments. This transition is part of SThree’s ongoing succession planning and aims to strengthen the Board’s strategic execution.

Business Operations and Strategy
SThree plc Announces Management Share Transactions
Positive
Nov 13, 2025

SThree plc has announced transactions involving its senior management, specifically Andrew Beach, the Chief Financial Officer, and Timo Lehne, the Chief Executive Officer, under the company’s Share Incentive Plan and Global All Employee Plan. These transactions, involving the purchase of partnership shares and the award of matching shares, reflect the company’s ongoing commitment to aligning management interests with shareholder value and enhancing employee participation in the company’s growth.

Regulatory Filings and Compliance
SThree plc Announces Total Voting Rights Update
Neutral
Oct 31, 2025

SThree plc has announced its total voting rights in accordance with the Financial Conduct Authority’s rules. As of 31 October 2025, the company has an issued share capital of 127,858,067 ordinary shares, with 35,767 held in treasury, resulting in 127,822,300 voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s transparency rules.

Other
SThree plc Announces Executive Share Transactions
Neutral
Oct 14, 2025

SThree plc has announced transactions involving its senior management, specifically the purchase of partnership shares and the award of matching shares under the company’s Share Incentive and Global All Employee Plans. These transactions, involving CFO Andrew Beach and CEO Timo Lehne, took place on the London Stock Exchange and reflect the company’s ongoing commitment to aligning management interests with shareholder value.

Executive/Board ChangesBusiness Operations and Strategy
SThree plc Announces Board Leadership Change
Neutral
Oct 6, 2025

SThree plc, a company involved in staffing and recruitment, has announced a significant change in its board of directors. Elaine O’Donnell, a non-executive director at SThree plc, has been appointed as the non-executive Chair of The Beauty Tech Group PLC, a company listed on the London Stock Exchange. This move is part of the company’s ongoing efforts to strengthen its leadership and governance, potentially impacting its strategic direction and stakeholder relations.

Shareholder MeetingsStock BuybackDividends
SThree plc Passes Key Special Resolution at General Meeting
Positive
Oct 1, 2025

SThree plc announced that a Special Resolution was passed at their General Meeting, authorizing the regularization of procedural requirements related to dividends and buy-backs, the release of claims against shareholders and directors, and the purchase of ordinary shares from brokers. This resolution, overwhelmingly supported by shareholders, with 99.98% votes in favor, is expected to streamline the company’s financial operations and potentially enhance shareholder value.

Regulatory Filings and Compliance
SThree plc Announces Total Voting Rights Update
Neutral
Sep 30, 2025

SThree plc announced its total voting rights as of 30 September 2025, with an issued share capital consisting of 127,858,067 ordinary shares and 127,822,300 total voting rights. This information is crucial for shareholders to determine their notification requirements under the Financial Conduct Authority’s rules, impacting how they manage their interests in the company.

Executive/Board ChangesBusiness Operations and Strategy
SThree plc Issues Shares to CEO Timo Lehne in Strategic Transaction
Neutral
Sep 17, 2025

SThree plc has announced a transaction involving the issuance of ordinary shares to its CEO, Timo Lehne, as consideration for the purchase of minority interests he held. This transaction, conducted off-market, involves a total of 7,404 shares at a price of £1.39 each, amounting to £10,292. This move reflects the company’s strategic efforts to consolidate its ownership structure and potentially strengthen its leadership alignment, which could have implications for its market positioning and stakeholder interests.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
SThree Reports Q3 FY25 Trading Update with Strategic Investments Ahead
Neutral
Sep 16, 2025

SThree plc reported a 12% year-on-year decline in group net fees for Q3 FY25, with a modest sequential improvement driven by growth in the US market. Despite challenges in new business activity and macroeconomic uncertainties, the company remains committed to its FY25 profit guidance and plans further investments in AI and cost optimization to enhance future scalability and efficiency. The company is also set to initiate a share buyback program in FY26, aiming to strengthen its market position and capitalize on emerging opportunities in the STEM recruitment industry.

Executive/Board ChangesBusiness Operations and Strategy
SThree plc Executives Participate in Share Incentive Plans
Neutral
Sep 15, 2025

SThree plc announced transactions involving its Chief Financial Officer, Andrew Beach, and Chief Executive Officer, Timo Lehne, who both participated in the company’s share incentive plans. These transactions, conducted on the London Stock Exchange, reflect the company’s commitment to aligning management interests with shareholder value, potentially impacting executive motivation and stakeholder confidence.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 07, 2025