Tern plc (TERN) AI Stock Analysis

• Market Cap: £3.46M
• Dividend Yield: N/A
• Average Volume (3M): 1.82M
• Price to Earnings (P/E): ―
• Beta (1Y): -0.64
• Revenue Growth: -77.04%
• EPS Growth: 86.67%
• Country: UK
• Employees: 8
• Sector: Financial
• Sector Strength: 70
• Industry: Software - Application
• EPS (TTM): >-0.01
• Shares Outstanding: 768,815,700
• 10 Day Avg. Volume: 495,937
• 30 Day Avg. Volume: 1,824,725
• PEG Ratio: 0.02
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 358.23
• P/FCF Ratio: -3.97
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 40 Underperform
• Price Target: 0.43p ▼(-34.15% Downside)
• Action: Downgraded Date: 01/17/26
• Date: Action: Downgraded 01/17/26

The score is primarily held down by poor financial performance (sharp revenue contraction, heavy losses, and negative operating/free cash flow). Technicals also point to a sustained downtrend with only tentative oversold stabilization signals. Valuation is difficult to support given negative earnings and no dividend yield data.

Positive Factors

Low Leverage

Tern's low debt-to-equity ratio indicates a conservative capital structure, providing financial stability and flexibility to navigate market fluctuations.

Investment Focus

By focusing on early-stage tech firms, Tern positions itself to capitalize on high-growth opportunities in digital transformation and IoT sectors.

Strategic Partnerships

Strategic partnerships can enhance growth trajectories of investee companies, potentially leading to higher returns and synergies for Tern.

Negative Factors

Revenue Decline

A significant drop in revenue indicates challenges in business operations or market demand, which could hinder long-term growth and profitability.

Negative Cash Flow

Sustained negative cash flow suggests operational inefficiencies and could limit Tern's ability to invest in growth opportunities or weather downturns.

Poor Profitability

Deeply negative net margins highlight significant losses, indicating that Tern must improve cost management and operational efficiency to achieve profitability.

Tern plc Business Overview & Revenue Model

Company Description

Tern plc (TERN) is a UK-based investment company that specializes in the technology sector, focusing on digital transformation and the Internet of Things (IoT). The company primarily invests in early-stage technology businesses that are developing innovative software solutions and applications aimed at enhancing operational efficiencies across various industries. Tern aims to create value through strategic investments, providing not just capital but also guidance and support to its portfolio companies to help them grow and achieve their potential.

How the Company Makes Money

Tern plc generates revenue primarily through capital appreciation from its investments in technology companies. The company's revenue model is centered on equity stakes in its portfolio firms, which may lead to significant returns when these companies grow, either through public offerings or acquisitions. Tern also benefits from potential dividend payouts if its portfolio companies become profitable. Key revenue streams include realized gains from exits and potentially management fees associated with managing its investments. Additionally, Tern may have partnerships with technology firms and venture capital entities that can provide synergies and enhance the growth trajectory of its investee companies, contributing to its earnings.

Tern plc Financial Statement Overview

Summary

Financials are weak: steep revenue decline (-75.08%), very negative net margin (-216.76%), and negative EBIT/EBITDA margins. Cash flow is also pressured with negative operating and free cash flow and declining FCF growth (-25.81%). Low leverage (debt-to-equity 0.015) is a relative positive but does not offset losses and cash burn.

Income Statement

Tern plc's income statement reveals significant challenges. The company has experienced a drastic decline in revenue, with a negative growth rate of 75.08% in the most recent year. Net profit margin is deeply negative at -216.76%, indicating substantial losses relative to revenue. Both EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. The company needs to address its revenue decline and improve cost management to enhance profitability.

Balance Sheet

The balance sheet shows a low debt-to-equity ratio of 0.015, suggesting minimal leverage and a conservative capital structure. However, the return on equity is negative at -35.22%, indicating that the company is not generating returns on shareholders' equity. The equity ratio is relatively healthy, but the company must improve its profitability to enhance shareholder value.

Cash Flow

Cash flow analysis highlights negative operating cash flow and free cash flow, with a decline in free cash flow growth by 25.81%. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The company must focus on improving cash generation from operations to support its financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.40K	17.40K	199.23K	-8.34M	6.10M	2.14M
Gross Profit	29.40K	17.40K	199.23K	66.01K	63.78K	151.16K
EBITDA	-1.13M	-1.18M	-12.67M	-10.25M	0.00	0.00
Net Income	-2.07M	-3.77M	-12.61M	-10.45M	4.58M	803.89K
Balance Sheet
Total Assets	10.94M	11.31M	13.15M	25.18M	32.76M	24.30M
Cash, Cash Equivalents and Short-Term Investments	74.00K	382.21K	297.56K	931.76K	1.96M	2.13M
Total Debt	170.00K	161.11K	418.20K	0.00	0.00	0.00
Total Liabilities	655.00K	597.62K	848.44K	325.00K	342.06K	295.60K
Stockholders Equity	10.29M	10.71M	12.30M	24.85M	32.42M	24.00M
Cash Flow
Free Cash Flow	-1.16M	-1.57M	-1.22M	-2.20M	-1.48M	-1.19M
Operating Cash Flow	-1.16M	-1.57M	-1.22M	-2.20M	-1.48M	-1.19M
Investing Cash Flow	-442.39K	-406.39K	151.92K	-1.63M	-2.50M	-1.86M
Financing Cash Flow	1.55M	1.65M	431.54K	2.80M	3.81M	4.17M

Tern plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.65
• 50DMA: Negative
• 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:TERN, the sentiment is Negative. The current price of 0.65 is above the 20-day moving average (MA) of 0.46, above the 50-day MA of 0.52, and below the 200-day MA of 0.77, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 45.26 is Neutral, neither overbought nor oversold. The STOCH value of 48.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:TERN.

Tern plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NET	68 Neutral	£202.88M	48.57	9.59%	0.80%	22.80%	-32.13%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
GETB	60 Neutral	£36.24M	207.58	―	―	1.73%	-68.87%
TIDE	58 Neutral	£6.08M	―	―	―	―	―
DSG	51 Neutral	£2.50M	93.33	0.89%	―	―	―
TERN	40 Underperform	£3.46M	-1.29	-19.70%	―	-77.04%	86.67%
RDT	40 Underperform	£2.15M	-0.61	-213.44%	―	5.29%	72.50%

Tern plc Corporate Events

Tern plc Forfeits SVV2 Fund Interest and Faces Potential Default Costs

Tern plc has lost its entire limited partner interest in the Sure Valley Ventures Enterprise Capital Fund LP (SVV2) after being classified as a defaulting investor under the fund’s limited partnership agreement, following its request for relief from funding obligations in late 2025. The company has been informed it will receive effectively no consideration for its former SVV2 interest and faces claims from the fund’s general partner for approximately £40,000 in default interest and costs, plus a further deemed indemnity exposure of about £184,000 through 2032; Tern is seeking legal advice, and the outcome could affect its financial obligations and underscores the risks around its fund-based investment strategy.

The most recent analyst rating on (GB:TERN) stock is a Hold with a £0.58 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.

Tern Plc Publishes Investor Presentations from IoT Portfolio Companies

Tern Plc has announced that investor presentation materials from its recent online event featuring portfolio companies Device Authority and Talking Medicines are now available to view via published links, with a recording of the session to be hosted shortly on the company’s website. By making these detailed presentations and the event recording accessible, Tern is enhancing transparency and engagement with investors, offering deeper insight into the progress and prospects of its key IoT-focused holdings, which may help support stakeholder understanding of the portfolio’s development and strategic positioning.

The most recent analyst rating on (GB:TERN) stock is a Hold with a £0.68 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.

Tern Plc Schedules Online Investor Presentation With Portfolio Companies

Tern Plc has scheduled an online investor presentation and Q&A session for 5.30 p.m. GMT on Wednesday 7 January 2026, to be led by members of its management team alongside executives from portfolio companies Device Authority and Talking Medicines. The event, open to both existing and prospective shareholders, is designed to provide direct engagement with management and greater visibility into Tern’s portfolio, underlining the company’s efforts to enhance investor communication and transparency around its strategy and the progress of its IoT investments.

The most recent analyst rating on (GB:TERN) stock is a Hold with a £0.63 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.

Tern Plc Enhances Investment in Talking Medicines with New Convertible Loan Notes

Tern Plc has been issued approximately £230,000 in new unsecured convertible loan notes by Talking Medicines Limited, in exchange for canceling existing short-term loans totaling about £180,000. This move increases Tern’s total convertible loan note holding in Talking Medicines to approximately £0.52 million while maintaining its 23.8% equity stake. Talking Medicines is raising up to £1.0 million through similar convertible loan notes to enhance its capabilities in the healthcare advertising market, which it aims to revolutionize with advanced data science and AI.

The most recent analyst rating on (GB:TERN) stock is a Hold with a £0.63 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.

Tern Plc Faces Funding Challenges with SVV2 Commitment

Tern Plc has announced an update regarding its capital commitment to Sure Valley Ventures Enterprise Capital Fund LP (SVV2). The company has invested approximately £1.3 million into SVV2 but faces challenges in meeting further capital calls due to insufficient funds and limited access to future funding. As a result, Tern has requested relief from its funding obligations, leading to its classification as a ‘defaulting investor’ under the SVV2 Limited Partnership Agreement. This status may affect Tern’s rights to distributions and recovery compared to non-defaulting investors. Despite these challenges, Tern aims to maintain its focus on protecting shareholder interests and long-term value creation from its key portfolio companies.

The most recent analyst rating on (GB:TERN) stock is a Hold with a £0.50 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.

Tern Plc Extends Convertible Loan Notes in Talking Medicines

Tern Plc has announced the extension of the maturity dates for approximately £0.3 million of convertible loan notes in Talking Medicines Limited to 21 November 2029. This strategic move is expected to enhance Tern’s negotiating position for a potential exit from its investment in Talking Medicines, aligning the terms of the loan notes with previous agreements.

The most recent analyst rating on (GB:TERN) stock is a Hold with a £0.50 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.

Tern plc Announces Total Voting Rights Update

Tern plc announced that its total issued ordinary share capital consists of 672,713,705 Ordinary Shares, each with one voting right, and none held in Treasury. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:TERN) stock is a Sell with a £0.50 price target. To see the full list of analyst forecasts on Tern plc stock, see the GB:TERN Stock Forecast page.