System1 (SYS1) AI Stock Analysis

• Market Cap: £28.42M
• Dividend Yield: 2.29%
• Average Volume (3M): 45.82K
• Price to Earnings (P/E): 10.0
• Beta (1Y): -0.10
• Revenue Growth: 3.32%
• EPS Growth: -10.58%
• Country: UK
• Employees: 160
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): <0.01
• Shares Outstanding: 12,689,073
• 10 Day Avg. Volume: 30,319
• 30 Day Avg. Volume: 45,820
• PEG Ratio: 0.15
• Price to Book (P/B): 5.47
• Price to Sales (P/S): 2.06
• P/FCF Ratio: 15.68
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £550.00
• Price Target Upside: 129.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 8.36
• Revenue Forecast (FY): £2.69B

• Rating: 69 Neutral
• Price Target: 254.00p ▲(5.83% Upside)

System1's strong financial performance and attractive valuation are significant positives. However, bearish technical indicators and mixed corporate events, including revenue declines and increased costs, weigh on the overall score. Insider confidence and strategic initiatives provide some optimism.

Positive Factors

High Profitability Margins

Exceptionally high gross and healthy operating/net margins reflect a scalable, low-cost digital advertising model and effective cost management. These margins support durable profitability, reinvestment in tech, and resilience across advertising cycles, sustaining long-term cash generation.

Very Low Leverage and Strong ROE

Minimal leverage and a strong equity base provide financial flexibility to invest, withstand downturns, or pursue M&A without stressing balance sheet health. High ROE indicates efficient capital deployment, supporting sustainable shareholder returns over time.

Robust Cash Generation

Consistent free cash flow growth and high FCF-to-profit conversion show the business reliably turns earnings into cash. That durability funds dividends, investment in platform improvements, and strategic initiatives, lowering execution risk over multiple quarters.

Negative Factors

Modest Revenue Growth

Revenue growth appears modest, limiting scale benefits from fixed-cost leverage and constraining upside to margins and cash flow expansion. Slower top-line momentum versus digital ad market could challenge long-term share gains and investor return potential.

Declining EPS Trend

Negative EPS growth signals pressure on per-share profitability, which may stem from margin compression, rising costs, or one-off items. Sustained EPS declines erode shareholder returns and may limit capital allocation flexibility over the medium term.

Corporate Event Risks — Costs and Revenue Mix

Reported revenue declines and rising costs in corporate updates indicate execution or market-mix risks. If structural, these trends could persistently pressure margins and growth, requiring clear strategic action to restore durable profitability and competitive positioning.

System1 Business Overview & Revenue Model

Company Description

System1 (SYS1) is a technology-driven company that specializes in digital advertising and consumer insights. Operating primarily in the digital marketing sector, System1 leverages its proprietary technology to optimize advertising campaigns and enhance customer engagement. The company provides a suite of products and services including programmatic advertising, search engine marketing, and data analytics, catering to a diverse range of clients looking to improve their online presence and drive conversions.

How the Company Makes Money

System1 generates revenue primarily through digital advertising services. Its revenue model is centered around performance-based advertising, where clients pay for the results achieved, such as clicks or conversions. Key revenue streams include programmatic ad placements, search engine marketing campaigns, and affiliate marketing partnerships. Additionally, System1 benefits from partnerships with various platforms and publishers, allowing it to expand its reach and enhance the effectiveness of its advertising solutions. The company's focus on data-driven marketing strategies and optimization tools also contributes significantly to its earnings, as clients are increasingly looking for measurable and effective advertising solutions.

System1 Financial Statement Overview

Summary

System1 exhibits strong financial performance with robust revenue growth, high profitability margins, and a stable balance sheet with low leverage. The company's cash flow generation is solid, supporting its operational and strategic initiatives.

Income Statement

System1 has demonstrated strong revenue growth with a 6.79% increase in the latest year, alongside impressive profitability metrics. The gross profit margin is high at 87.80%, indicating efficient cost management. The net profit margin improved significantly to 11.95%, reflecting enhanced operational efficiency. EBIT and EBITDA margins are robust at 14.24% and 17.91%, respectively, showcasing strong earnings performance.

Balance Sheet

The company's balance sheet is stable with a low debt-to-equity ratio of 0.037, indicating minimal leverage and financial risk. Return on equity is strong at 31.72%, suggesting effective use of equity to generate profits. The equity ratio stands at 64.16%, highlighting a solid equity base relative to total assets.

Cash Flow

System1's cash flow position is healthy, with a 7.38% growth in free cash flow, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.70, suggesting efficient conversion of income into cash. The free cash flow to net income ratio is high at 89.21%, reflecting strong cash profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	36.21M	37.43M	30.02M	23.41M	24.10M	22.84M
Gross Profit	30.30M	32.86M	26.12M	19.72M	20.20M	19.11M
EBITDA	4.46M	6.70M	4.40M	2.04M	2.06M	4.33M
Net Income	2.83M	4.47M	2.03M	404.00K	955.00K	1.69M
Balance Sheet
Total Assets	20.44M	21.98M	19.09M	14.98M	18.59M	17.41M
Cash, Cash Equivalents and Short-Term Investments	10.75M	12.83M	9.61M	5.72M	11.17M	9.01M
Total Debt	1.13M	526.00K	346.00K	1.46M	5.01M	5.08M
Total Liabilities	6.08M	7.88M	8.52M	6.37M	10.33M	10.17M
Stockholders Equity	14.36M	14.10M	10.57M	8.61M	8.26M	7.23M
Cash Flow
Free Cash Flow	3.50M	4.92M	5.10M	-1.88M	3.90M	3.71M
Operating Cash Flow	3.67M	5.51M	5.93M	-628.00K	4.04M	3.91M
Investing Cash Flow	-627.00K	-595.00K	-833.00K	-1.25M	-138.00K	-198.00K
Financing Cash Flow	-1.23M	-1.33M	-1.12M	-3.82M	-1.95M	-1.09M

System1 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 240.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SYS1, the sentiment is Negative. The current price of 240 is above the 20-day moving average (MA) of 221.60, above the 50-day MA of 222.84, and below the 200-day MA of 327.13, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 48.60 is Neutral, neither overbought nor oversold. The STOCH value of 47.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SYS1.

System1 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YOU	75 Outperform	£282.28M	20.90	7.16%	3.68%	15.99%	―
SYS1	69 Neutral	£28.42M	10.04	21.43%	2.29%	3.32%	-10.58%
SAA	65 Neutral	£161.21M	21.04	18.23%	1.09%	-21.19%	-29.54%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
SFOR	54 Neutral	£178.68M	-0.50	-45.75%	6.33%	-14.27%	-15466.67%
TMG	49 Neutral	£17.67M	-6.72	-3.81%	―	-25.20%	78.55%
EBQ	48 Neutral	£17.93M	-1.43	-37.24%	―	-0.79%	-100.22%

System1 Corporate Events

System1 Reshapes Board Oversight, Integrates QualCo Role Into Full Board

System1 Group PLC has announced changes to its board governance structure, integrating the remit of its recently formed QualCo committee into the full board and confirming founder John Kearon’s ongoing role as a non-executive director. The board determined that QualCo’s original mandate around strategic guidance on thought leadership and creative effectiveness risked overlapping with management’s responsibility for operational execution, so these oversight functions will now be handled by the full board while day-to-day operations remain firmly under management’s control, refining governance without diminishing Kearon’s strategic influence.

The most recent analyst rating on (GB:SYS1) stock is a Buy with a £550.00 price target. To see the full list of analyst forecasts on System1 stock, see the GB:SYS1 Stock Forecast page.

System1 Q3 Platform Revenue Rebounds as New Clients Offset Consultancy Weakness

System1 Group PLC reported that platform revenue in the third quarter to 31 December 2025 recovered versus the first half, matching the prior year’s record Q3 and rising 1% in constant currency, driven by a rebound in ad-testing demand from major UK and European clients and continued momentum in its Innovation Platform. However, weakness in non-platform consultancy work, which fell £0.4m year-on-year in Q3, led to a 4% decline in total reported Group revenue for the quarter and a 6% decline year-to-date, although revenue from new client wins rose 10% in the first nine months, contributing £7.4m of £25.7m platform revenue and signalling a growing customer base and longer-term growth opportunities. The company ended December with £8.3m of net cash after paying a £1.4m dividend and reaffirmed its full-year 2026 guidance for revenue broadly in line with the prior year and improved adjusted profitability, indicating management’s confidence that the Q3 recovery and new client momentum will support performance despite ongoing macroeconomic and consultancy headwinds.

The most recent analyst rating on (GB:SYS1) stock is a Hold with a £223.00 price target. To see the full list of analyst forecasts on System1 stock, see the GB:SYS1 Stock Forecast page.

System1 Adds Singer Capital Markets as Joint Corporate Broker

System1 Group PLC has appointed Singer Capital Markets as a joint corporate broker, working alongside its existing nominated adviser and broker, Canaccord Genuity Limited. The move is likely aimed at strengthening the company’s capital markets support, potentially broadening its investor reach and enhancing its profile in the equity markets as it continues to execute its strategy in the marketing insights sector.

The most recent analyst rating on (GB:SYS1) stock is a Hold with a £223.00 price target. To see the full list of analyst forecasts on System1 stock, see the GB:SYS1 Stock Forecast page.

System1 Group Reports Revenue Decline Amidst Strategic Growth Initiatives

System1 Group PLC reported a 7% decline in total revenue for the first half of the fiscal year 2026, with platform revenue decreasing by 3%. Despite challenges from macroeconomic uncertainties and reduced client spending, the company saw growth in the USA and APAC regions and continued to expand its client base with significant new business wins. The company’s strategic focus on innovation and partnerships, such as collaborations with TikTok and JCDecaux, contributed to a 26% increase in innovation revenue. However, operating costs rose by 7% due to investments in growth, and profit before taxation dropped significantly by 90%.

The most recent analyst rating on (GB:SYS1) stock is a Hold with a £234.00 price target. To see the full list of analyst forecasts on System1 stock, see the GB:SYS1 Stock Forecast page.