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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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Neutral 69 (OpenAI - 5.2)
Rating:69Neutral
Price Target:
209.00p
▲(13.59% Upside)
Action:DowngradedDate:01/29/26
The score is driven primarily by resilient cash generation and a still-manageable balance sheet, partially offset by a notable recent deterioration in revenue and margins. Technicals are moderately positive with improving momentum (though still just below the 200-day trend), and valuation is supportive due to a reasonable P/E and high dividend yield.
Positive Factors
Free cash flow strength
Strong free cash flow (~£56m in 2025, ~94% of net income) and consistent positive operating cash flow provide durable liquidity to fund dividends, invest in talent/platforms, reduce debt in downturns and absorb working-capital swings inherent to recruitment cycles.
Serviceable balance sheet
Although leverage has risen, debt at ~0.36x equity and sizeable equity (~£235m) leave headroom to withstand cyclical shocks. A serviceable capital structure supports continued investment in markets and provides options for measured deleveraging or opportunistic M&A without immediate distress.
STEM market specialization
Focused positioning in STEM sectors and a mixed contract/permanent revenue model create structural advantages: recurring contract streams smooth volatility, deep sector networks drive candidate flow, and niche expertise supports pricing power and long-term client relationships.
Negative Factors
Revenue deterioration
A multi-year top-line weakening (2025 down ~5.5%) reduces scale and operating leverage in a business where fixed overheads and sales capacity matter. Persistent revenue decline limits reinvestment, pressures margins and makes recovery dependent on cyclical or structural demand improvements.
Margin compression
Sharp margin erosion (net margin ~1.4%, gross margin down to ~23.4%) indicates pressure on pricing, spreads or mix. Narrower margins reduce the buffer against downturns, constrain reinvestment and heighten sensitivity to staffing or client-mix shifts, undermining durable profitability.
Rising leverage & weak ROE
Higher leverage alongside a collapse in ROE (to ~7.5% from historically 20–27%) reduces financial optionality. This combination raises refinancing and interest-rate exposure, limits capacity for shareholder returns or investment, and signals the need for improved capital allocation to restore returns.

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

SThree plc Business Overview & Revenue Model

Company DescriptionSThree plc provides specialist contract and permanent staffing services for technology, engineering, life sciences, banking and finance, and other sectors. It offers permanent, contract, project, retained, and executive search recruitment solutions, as well as support and mobility services. The company provides its services under the Computer Futures, Progressive, Huxley Associates, Real Staffing Group, Global Enterprise Partners, JP Gray, Madison Black, and Newington International brands. It has operations in the United Kingdom, Germany, the United States, the Netherlands, Japan, Dubai, Belgium, France, Ireland, Luxembourg, Spain, Austria, Switzerland, Hong Kong, Malaysia, Singapore, and internationally. SThree plc was founded in 1986 and is headquartered in London, the United Kingdom.
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
Cash flow is a clear strength (2025 free cash flow ~£56m and ~94% of net income), and the balance sheet remains serviceable despite higher leverage (debt ~0.36x equity). Offsetting this, operations are in a cyclical downswing: revenue declined in 2025 (~-5.5%) and profitability compressed materially (net margin ~1.4% vs ~3.3% in 2022–2024), driving much weaker returns (ROE ~7.5%).
Income Statement
58
Neutral
Revenue has weakened recently (2025 down ~5.5% after a flat-to-down 2024), and profitability compressed sharply in 2025 with net margin falling to ~1.4% (vs. ~3.3% in 2022–2024). Gross margin has also drifted down to ~23.4% in 2025 from ~25% levels previously, signaling a tougher pricing/spread environment. Offsetting this, the business has shown it can generate mid-single-digit operating profitability in better years, but the latest year reflects a clear cyclical downswing.
Balance Sheet
63
Positive
Leverage remains reasonable, with debt at ~0.36x equity in 2025 (up from ~0.16x in 2024), suggesting some balance-sheet risk has increased but not to stressed levels. Equity is still sizable (£235m) and supports the asset base, though returns on equity have fallen materially to ~7.5% in 2025 from ~20–27% in 2021–2024, reflecting the earnings downturn. Overall, the balance sheet looks serviceable, but the upward move in debt and weaker returns reduce the margin of safety versus prior years.
Cash Flow
72
Positive
Cash generation is a key positive: 2025 free cash flow rose to ~£56m (strong growth year-over-year) despite much lower reported earnings, and free cash flow remains robust relative to net income (~94%). Operating cash flow has been positive each year shown, supporting resilience through the cycle. The main watch-out is that operating cash flow as a share of revenue remains modest (~0.29 in 2025), so cash performance can be sensitive to trading conditions and working-capital swings.
BreakdownNov 2025Nov 2024Nov 2023Nov 2022Nov 2021
Income Statement
Total Revenue1.30B1.49B1.66B1.64B1.33B
Gross Profit305.02M369.08M418.77M411.71M338.00M
EBITDA45.28M84.34M94.53M96.59M78.74M
Net Income17.67M49.69M56.05M54.20M41.98M
Balance Sheet
Total Assets483.40M506.73M472.30M470.44M400.63M
Cash, Cash Equivalents and Short-Term Investments67.96M69.76M83.20M65.81M57.53M
Total Debt84.45M39.87M29.02M34.13M35.09M
Total Liabilities248.31M258.08M249.42M270.05M242.48M
Stockholders Equity235.10M248.64M222.88M200.39M158.15M
Cash Flow
Free Cash Flow56.21M32.85M67.83M41.26M34.27M
Operating Cash Flow59.60M39.68M76.04M44.93M36.92M
Investing Cash Flow-8.63M-13.17M-8.21M-3.67M-2.65M
Financing Cash Flow-52.49M-39.92M-52.15M-38.54M-24.97M

SThree plc Technical Analysis

Technical Analysis Sentiment
Negative
Last Price184.00
Price Trends
50DMA
182.26
Negative
100DMA
170.20
Positive
200DMA
189.68
Negative
Market Momentum
MACD
-2.88
Positive
RSI
38.89
Neutral
STOCH
18.74
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:STEM, the sentiment is Negative. The current price of 184 is above the 20-day moving average (MA) of 182.64, above the 50-day MA of 182.26, and below the 200-day MA of 189.68, indicating a bearish trend. The MACD of -2.88 indicates Positive momentum. The RSI at 38.89 is Neutral, neither overbought nor oversold. The STOCH value of 18.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
71
Outperform
£38.14M16.976.45%3.35%2.40%1101.69%
70
Outperform
£13.81M7.8223.32%6.40%-6.12%4.30%
69
Neutral
£220.33M12.6712.99%6.35%-13.93%-48.74%
64
Neutral
£631.65M52.774.81%7.58%-12.54%-76.55%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
53
Neutral
£79.59M-5.51-11.22%12.88%-14.31%-361.93%
46
Neutral
£740.40M-93.27-1.52%1.76%-4.92%-58.06%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:STEM
SThree plc
172.40
-57.84
-25.12%
GB:GATC
Gattaca
121.50
38.85
47.00%
GB:HAS
Hays plc
46.04
-23.28
-33.59%
GB:PAGE
PageGroup
196.20
-107.46
-35.39%
GB:RWA
Robert Walters
125.00
-117.36
-48.42%
GB:RTC
RTC Group plc
110.00
15.98
17.00%

SThree plc Corporate Events

Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
SThree Profits Slump but Tech Upgrade and Cash Strength Support New Buyback
Negative
Jan 27, 2026

SThree reported a sharp fall in profitability for the year to 30 November 2025 as challenging macroeconomic conditions drove a 12% like-for-like decline in net fees and a 62% drop in profit before tax to £25.5m, though trends improved sequentially and the US business returned to growth. Contract work, which makes up 84% of net fees, and permanent placements both declined, while Germany and the Netherlands weakened even as the US grew 4%, but the group maintained a robust contractor order book, preserved its total dividend at 14.3p per share, and ended the year with net cash of £68m after a £20.2m buyback. The company completed the rollout of its Technology Improvement Programme across all 11 markets on time and on budget, reporting early gains in consultant productivity and operational efficiency that it expects will support scalable growth and margin recovery as markets improve. Reflecting confidence in its balance sheet and cash generation, the board has proposed an unchanged final dividend and announced a further share buyback of up to £20m, while management signals cautious optimism for FY26, highlighting cost optimisation, selective growth in key markets such as the US, and a stronger operational backbone to capture opportunities when demand normalises.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Regulatory Filings and Compliance
SThree Executives Acquire Shares Under Company Employee Plans
Positive
Jan 13, 2026

SThree plc has disclosed share transactions by two senior executives under its employee share schemes, in line with market abuse regulations. Chief Financial Officer Andrew Beach acquired partnership shares and received matching shares under the SThree Share Incentive Plan, while Chief Executive Officer Timo Lehne purchased partnership shares and was awarded matching shares under the Global All Employee Plan, signalling continued alignment of top management’s interests with shareholders through equity participation.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Regulatory Filings and Compliance
SThree Updates Market on Total Voting Rights
Neutral
Jan 2, 2026

SThree plc has reported that as of 31 December 2025 its issued share capital comprised 127,858,067 ordinary shares, of which 35,767 are held in treasury, resulting in a total of 127,822,300 voting rights. The updated voting rights figure provides shareholders with the denominator needed to assess and disclose significant holdings in line with UK financial transparency rules, ensuring ongoing compliance with regulatory requirements and clarity over the company’s capital structure for investors and market participants.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Business Operations and Strategy
SThree Expands Employee Benefit Trust with £744,771 Share Purchase
Neutral
Jan 2, 2026

SThree plc has disclosed that its Employee Benefit Trust, administered by Computershare Trustees (Jersey) Limited, acquired 400,478 ordinary shares on the London Stock Exchange between 17 and 30 December 2025 for a total consideration of £744,771. The shares, to be held in the SThree Employees’ Share Ownership Plan Trust, will be used to satisfy awards under the group’s employee share schemes, bringing the trust’s total holding to 977,032 shares, or 0.76% of the company’s issued share capital, underscoring ongoing use of equity-based incentives to align employees’ interests with shareholders.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Dividends
SThree Executives Boost Holdings via Dividend Reinvestment Plan
Positive
Dec 19, 2025

SThree plc has disclosed that Chief Financial Officer Andrew Beach and Chief Executive Officer Timo Lehne acquired additional ordinary shares in the company through its Dividend Reinvestment Plan on 16 December 2025. The transactions, executed on the London Stock Exchange, involved the automatic reinvestment of cash dividends into SThree shares held via nominees, modestly increasing the executives’ equity stakes and signalling continued alignment of senior management’s interests with those of shareholders.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Business Operations and StrategyStock BuybackFinancial Disclosures
SThree plc Reports FY25 Performance and Strategic Advancements
Neutral
Dec 16, 2025

SThree plc reported its FY25 performance in line with expectations, despite a 12% year-on-year decline in net fees. The company successfully completed its Technology Improvement Programme (TIP) across all markets, enhancing operational efficiency and positioning for scalable growth. The US market returned to growth, mitigating declines in other regions. SThree maintained a strong balance sheet with net cash of £68 million, and plans for a further share buyback program. The company remains focused on capturing growth opportunities and improving productivity amid challenging market conditions.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Other
SThree plc Executives Engage in Share Transactions
Positive
Dec 15, 2025

SThree plc has announced transactions involving its Director and Chief Financial Officer, Andrew Beach, and its Director and Chief Executive Officer, Timo Lehne. Both executives have engaged in the purchase of partnership shares and received matching shares under the company’s Share Incentive Plan and Global All Employee Plan, respectively. These transactions, conducted on the London Stock Exchange, reflect the company’s ongoing commitment to aligning its leadership’s interests with shareholder value, potentially enhancing stakeholder confidence in its governance practices.

The most recent analyst rating on (GB:STEM) stock is a Buy with a £188.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

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.

The most recent analyst rating on (GB:STEM) stock is a Hold with a £173.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

Business Operations and StrategyExecutive/Board Changes
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.

The most recent analyst rating on (GB:STEM) stock is a Hold with a £173.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

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.

The most recent analyst rating on (GB:STEM) stock is a Hold with a £173.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

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.

The most recent analyst rating on (GB:STEM) stock is a Hold with a £173.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

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.

The most recent analyst rating on (GB:STEM) stock is a Hold with a £173.00 price target. To see the full list of analyst forecasts on SThree plc stock, see the GB:STEM Stock Forecast page.

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: Jan 29, 2026