System1 (SST) AI Stock Analysis

• Market Cap: $17.02M
• Dividend Yield: N/A
• Average Volume (3M): 29.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.63
• Revenue Growth: -20.49%
• EPS Growth: 25.95%
• Country: US
• Employees: 300
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): -1.67
• Shares Outstanding: 8,083,497
• 10 Day Avg. Volume: 21,441
• 30 Day Avg. Volume: 29,656
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.12
• P/FCF Ratio: -7.34
• Enterprise Value/Market Cap: -3.53
• Enterprise Value/Revenue: -0.23
• Enterprise Value/Gross Profit: -0.60
• Enterprise Value/Ebitda: -2.89
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -7.92
• Revenue Forecast (FY): $235.90M

• Rating: 43 Neutral
• Price Target: $2.00 ▼(-44.13% Downside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is held down primarily by weak financial performance (declining revenue, ongoing losses, and negative cash flow). Technicals also indicate a strong downtrend despite oversold readings, while valuation lacks support due to losses and no dividend. The earnings call adds some offset from Product-segment resilience and planned stabilization/AI initiatives, but near-term marketing disruption remains a key risk.

Positive Factors

Product segment growth

Sustained product growth (8% revenue, 23% sessions) shows the company can scale owned products independent of volatile marketing revenue. Higher-margin products like Startpage and MapQuest expand recurring monetization and user engagement, supporting more stable revenue and gross profit over the coming quarters.

Reduced leverage

Material debt reduction meaningfully lowers financing risk and increases strategic flexibility. With a more modest debt-to-equity profile, System1 can better fund product initiatives and AI investments without immediate refinancing pressure, reducing the chance of liquidity-driven disruption over the medium term.

AI integration & new products

Embedding AI across products and launching privacy-focused offerings like Vanish represents a structural shift. AI can improve ad matching, lifetime value, and product differentiation while addressing privacy trends, supporting sustainable improvements in monetization and competitive positioning over multiple quarters.

Negative Factors

Multi-year revenue decline

Four straight years of revenue decline signal structural demand and scale challenges. Shrinking top-line reduces fixed-cost absorption and makes profitability harder to achieve; even with margin improvement, reversing this trend is necessary for durable recovery in earnings and cash flow.

Weak cash generation

Persistent negative operating and free cash flow increases funding and execution risk. Continued cash burn constrains R&D/marketing investment or forces dilutive financing, limiting the company’s ability to scale products and execute AI initiatives without worsening leverage or shareholder dilution.

Marketing partner/traffic risk

Dependence on third-party ad products and partners creates structural volatility: loss of Google AFD and partner traffic-quality issues directly cut marketing revenue and can lead to disputes or reimbursements. This fragility undermines revenue predictability and advertiser confidence over the medium term.

System1 Business Overview & Revenue Model

Company Description

System1, Inc. develops technology and data science to operate responsive acquisition marketing platform. The company also operates a real-time coupon code search engine and directory that offers coupon destinations for online shoppers. It serves customers in the areas of health, subscription, finance, insurance, business and technology, travel, auto, and other direct-to-consumer businesses. The company was founded in 2013 and is based in Los Angeles, California.

How the Company Makes Money

System1 primarily makes money by generating performance advertising revenue tied to measurable outcomes (e.g., clicks, leads, calls, or conversions) rather than purely impression-based brand advertising. A key revenue stream is monetizing consumer intent on its owned-and-operated properties (websites/apps) by placing and optimizing ads from advertisers and advertising partners; System1 earns revenue when users take billable actions. Another major stream comes from operating an advertising platform that acquires traffic (through partnerships and media buying) and routes that traffic to advertisers or monetization partners, with System1 capturing the spread between traffic acquisition costs and advertising revenue generated. Revenue is influenced by the volume and quality of user traffic, the effectiveness of its matching/optimization technology, advertiser demand and pricing, and the costs to acquire traffic. Significant earnings drivers can include relationships with large advertising ecosystems (e.g., search and other digital ad marketplaces) and commercial agreements with advertisers, publishers, and distribution partners; specific partnership terms and exact partner contributions are null.

System1 Financial Statement Overview

Summary

Fundamentals remain pressured: multi-year revenue contraction, ongoing net losses, and persistent negative operating/free cash flow (cash burn) outweigh the positive of materially reduced debt and modest balance-sheet de-risking.

Income Statement

Revenue has contracted for four consecutive years (2022–2025), with the latest annual decline of ~8%. Profitability has also deteriorated: the company has been consistently loss-making since 2022, with 2025 showing a large net loss and negative operating profitability, despite a still-decent gross margin. A key positive is that losses have narrowed materially versus 2022–2023, but the business has not yet returned to sustainable positive earnings.

Balance Sheet

Leverage has improved significantly: total debt fell sharply by 2025 and the debt-to-equity level is now modest, reducing financial risk compared with 2022–2024. However, the company continues to generate negative returns for shareholders (negative return on equity), and the asset base remains large relative to equity, signaling that balance-sheet strength is better than recent years but still pressured by ongoing losses.

Cash Flow

Cash generation is currently weak: operating cash flow and free cash flow are negative in 2022–2025, including another cash outflow in 2025. While free cash flow looks less negative than in 2023, the overall trajectory shows persistent cash burn and volatility, which increases funding and execution risk until the business can consistently produce positive cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Mar 2023	Mar 2022
Income Statement
Total Revenue	266.13M	343.93M	401.97M	664.94M	688.39M
Gross Profit	100.39M	152.36M	46.72M	15.37M	86.64M
EBITDA	20.82M	14.00M	-4.48M	-51.95M	64.72M
Net Income	-81.19M	-74.67M	-227.22M	-367.45M	33.00M
Balance Sheet
Total Assets	404.97M	459.13M	605.47M	1.16B	256.91M
Cash, Cash Equivalents and Short-Term Investments	86.89M	63.61M	135.34M	8.90M	47.90M
Total Debt	9.61M	274.98M	355.42M	422.55M	170.45M
Total Liabilities	387.55M	374.13M	436.15M	689.78M	285.31M
Stockholders Equity	30.47M	80.26M	135.28M	392.02M	-28.40M
Cash Flow
Free Cash Flow	-4.19M	-5.29M	-32.70M	-17.66M	54.17M
Operating Cash Flow	-4.15M	-5.25M	-24.74M	-7.29M	60.70M
Investing Cash Flow	-6.72M	-6.25M	203.18M	-454.45M	-6.54M
Financing Cash Flow	31.30M	-63.96M	-74.07M	-27.73M	-34.59M

System1 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SST, the sentiment is Negative. The current price of 3.58 is above the 20-day moving average (MA) of 2.91, below the 50-day MA of 3.61, and below the 200-day MA of 5.37, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 16.48 is Positive, neither overbought nor oversold. The STOCH value of 9.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SST.

System1 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACTG	67 Neutral	$486.24M	16.61	4.02%	―	71.28%	-89.20%
LZ	66 Neutral	$1.08B	115.09	8.17%	―	7.17%	-5.86%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DLHC	53 Neutral	$83.62M	-15.35	-0.95%	―	-12.99%	-81.86%
TISI	51 Neutral	$62.99M	-1.29	-1862.25%	―	3.73%	3.56%
SPIR	49 Neutral	$375.15M	-4.54	44.29%	―	-31.51%	―
SST	43 Neutral	$17.02M	-0.38	-131.65%	―	-20.49%	25.95%

System1 Corporate Events

System1 Reports Ongoing Revenue Declines and Profitability Pressures

On March 11, 2026, System1 posted supplemental financial information for the quarter and year ended Dec. 31, 2025, showing a continued decline in GAAP revenue versus the prior year and persistent operating losses despite meaningful non-cash expenses. Quarterly GAAP revenue fell to $51.9 million from $75.6 million a year earlier, while net loss narrowed to $13.5 million from $14.2 million, and adjusted EBITDA declined to $8.2 million from $17.9 million, underscoring ongoing profitability pressures even as the company maintained a stable return on traffic acquisition costs and modest growth in sessions across its products.

Marketing platform revenue for the quarter dropped to $80.1 million from $120.0 million a year earlier, while traffic acquisition costs decreased to $66.7 million, preserving a 120% return on those costs. Products segment GAAP revenue slid to $24.5 million from $27.1 million, though monetizable sessions increased to about 590.3 million and revenue per session held at roughly $0.04, highlighting a strategy focused on scale and efficiency but leaving investors facing continued losses and reliance on non-GAAP measures such as adjusted EBITDA to assess operating performance.

The most recent analyst rating on (SST) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.

System1 director Frank Martire Jr. resigns from board

On January 9, 2026, System1 announced that director Frank Martire Jr., who had served on the company’s board since before its deSPAC merger, resigned from the board effective at the close of business that same day. The company stated that Martire’s departure was not the result of any disagreement over operations, policies, or practices, suggesting a routine board change without disclosed governance conflict or immediate operational implications for stakeholders.

The most recent analyst rating on (SST) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.