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System1 (SST)
NYSE:SST
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System1
(NYSE:SST)
41Neutral
System1 (SST) vs. S&P 500 (SPY)
Market Cap
$35.63M
Dividend YieldN/A
Average Volume (3M)145.19K
Price to Earnings (P/E)―
Beta (1Y)1.38
Revenue Growth-31.08%
EPS Growth56.20%
CountryUS
Employees300
SectorIndustrials
Sector Strength66
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)-1.06
Shares Outstanding74,510,020
10 Day Avg. Volume143,079
30 Day Avg. Volume145,188
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.14
Price to Cash Flow (P/CF)15.10
P/FCF Ratio15.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.00Price Target Upside1215.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
System1 Business Overview & Revenue Model
Company DescriptionSystem1, 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 MoneySystem1 generates revenue through a performance marketing model that focuses on acquiring and monetizing user traffic. Its primary revenue streams include search advertising, where they earn by directing traffic to partner websites and receiving a share of the advertising revenue generated. Additionally, System1 engages in affiliate marketing, earning commissions by promoting and driving traffic to third-party products and services. The company's earnings are also bolstered by partnerships with major search engines and digital advertising networks, which facilitate the delivery of targeted advertisements to users. These partnerships, alongside their technology platform, play a crucial role in optimizing ad spend and maximizing return on investment for advertisers.
System1 Financial Statement Overview
Summary
System1 is struggling with declining revenue, persistent losses, and high leverage. The company faces profitability challenges as reflected in negative margins and cash flows. Addressing these issues is crucial for financial stability and future growth.Income Statement
System1's revenue has been declining significantly, evidenced by a 14.44% decrease from 2023 to 2024. The company also faces negative net and EBIT margins, indicating operational challenges and poor profitability. Gross profit margin improved in 2024, but the company remains unprofitable overall.45
Neutral
Balance Sheet
The company's balance sheet reflects high leverage, with a total debt of $3.454 million against a modest equity base, resulting in a low debt-to-equity ratio. Equity has decreased significantly over recent years, and the equity ratio is low, posing financial risk.35
Negative
Cash Flow
System1 shows a negative free cash flow trend, with a slight increase in 2024 but still negative overall. Operating cash flow remains negative, leading to poor cash flow coverage of net income. The company needs to improve cash generation for sustainability.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 343.93M | 401.97M | 826.65M | 688.39M | 475.98M | Gross Profit |
| 152.36M | 46.72M | 305.54M | 675.06M | 134.98M | EBIT |
| -88.60M | -85.99M | 50.83M | -13.33M | 42.62M | EBITDA |
| 14.00M | -4.48M | -427.61M | 64.72M | 52.92M | Net Income Common Stockholders |
| -74.67M | -227.22M | 33.00M | 21.03M | 16.36M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 63.61M | 135.34M | 24.61M | 53.15K | 29.01M | Total Assets |
| 459.13M | 605.47M | 1.16B | 517.62M | 218.68M | Total Debt |
| 3.45M | 355.42M | 422.55M | 450.00K | 179.97M | Net Debt |
| -60.15M | 220.07M | 397.94M | 396.85K | 150.96M | Total Liabilities |
| 374.13M | 436.15M | 687.67M | 60.43M | 266.91M | Stockholders Equity |
| 80.26M | 135.28M | 383.98M | 457.19M | -48.23M |
| Cash Flow | Free Cash Flow | |||
| -5.29M | -32.70M | -17.66M | -7.78M | 40.42M | Operating Cash Flow |
| -5.25M | -24.74M | -7.29M | -1.24M | 46.55M | Investing Cash Flow |
| -6.25M | 203.18M | -454.45M | -6.54M | 68.17M | Financing Cash Flow |
| -63.96M | -74.07M | -27.73M | 450.00K | -128.07M |
System1 Technical Analysis
Negative
0.38
Price Trends
0.56
Negative
0.74
Negative
0.99
Negative
Market Momentum
-0.06
Positive
32.61
Neutral
11.90
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 0.38 is below the 20-day moving average (MA) of 0.44, below the 50-day MA of 0.56, and below the 200-day MA of 0.99, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 32.61 is Neutral, neither overbought nor oversold. The STOCH value of 11.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SST.
System1 Risk Analysis
System1 disclosed 61 risk factors in its most recent earnings report. System1 reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
System1 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.93B | 18.66 | 10.43% | ― | -1.22% | 112.13% | |
67 Neutral | $366.15M | 31.21 | 1.75% | ― | -32.95% | -89.11% | |
66 Neutral | $24.35B | 62.88 | 15.37% | ― | 25.63% | 118.49% | |
64 Neutral | $1.63B | 82.98 | 3.10% | ― | 7.82% | ― | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
50 Neutral | $296.12M | ― | -101.69% | ― | -15.51% | -54.09% | |
41 Neutral | $35.63M | ― | -69.29% | ― | -31.08% | 56.20% |
* Industrials Sector Average
Performance Comparison
SST
System1
0.33
-1.89
-85.14%
PERI
Perion Network
8.13
-13.24
-61.96%
CRTO
Criteo SA
32.62
-2.30
-6.59%
MGNI
Magnite
9.70
-0.15
-1.52%
APPS
Digital Turbine
2.58
0.33
14.67%
TTD
Trade Desk
49.08
-35.48
-41.96%
System1 Earnings Call Summary
Earnings Call Date: Mar 10, 2025 | % Change Since: -22.45% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
System1 reported strong growth in adjusted EBITDA and significant performance improvements in owned and operated products, including CouponFollow. However, the company faces challenges due to volatility in the Google Search Partner Network and a decline in overall revenue.Highlights
Strong Growth in Adjusted EBITDA
Adjusted EBITDA increased by 79% year-over-year to $17.9 million, with a quarter-over-quarter growth of 73%.
Owned and Operated Products Performance
The owned and operated segment saw a 60% increase in revenue year-over-year and a 30% sequential increase, driven by products like Startpage, MapQuest, and CouponFollow.
CouponFollow's Strong Performance
CouponFollow had a strong holiday season with organic sessions up 129% year-over-year and browser extension users more than doubled.
International Revenue Growth
International revenue now represents 36% of total owned and operated revenue, up from 26% in Q4 2023.
Positive AI Integration Impact
Investment in AI has increased efficiency and scale across marketing operations, leading to better ad production and rapid changes in bid pricing.
Lowlights
Google Search Partner Network Volatility
System1 faces ongoing volatility due to Google changes, leading to a 26% sequential decline in advertising spend.
Revenue Decline
Q4 revenue was $75.6 million, representing a 21% year-over-year decrease and a 15% sequential decline.
Owned and Operated Revenue Decline
Total owned and operated revenue reached $65 million, reflecting a 19% year-over-year decline and a 9% sequential decrease.
Challenges with Google AFD and RSOC Transition
Google's decision to shift from AFD to RSOC is expected to cause short-term business and product disruption.
Company Guidance
During the fourth quarter of 2024, System1 reported $76 million in revenue and $45 million in gross profit, with an adjusted EBITDA of $17.9 million, marking a 79% year-over-year increase. The company's owned and operated products, such as Startpage, MapQuest, and CouponFollow, drove a 60% revenue increase compared to the previous year. However, marketing-driven businesses faced challenges due to volatility in Google's Search Partner Network, leading to a 26% sequential decline in advertising spend. The total revenue from owned and operated segments was $65 million, a 19% year-over-year decline, yet adjusted gross profit rose 20% to $32 million. Sessions across properties totaled 1.9 billion, up 79% year-over-year. International markets contributed 36% of the total owned and operated revenue, up from 26% in Q4 2023. System1 also highlighted a strategic shift toward Google's RSOC product, anticipating medium-term benefits despite short-term disruptions. For Q1 2025, System1 estimates its revenue to range between $69 million and $71 million and adjusted gross profit to grow 25% year-over-year.System1 Corporate Events
Financial Disclosures
System1 Releases Q4 2024 Financial Information
Neutral
Mar 10, 2025
On March 10, 2025, System1, Inc. released supplemental financial information for the quarter ending December 31, 2024, on its website. The company also made an investor presentation available, which may be used for future investor engagements. These updates provide stakeholders with detailed insights into the company’s financial performance and strategic direction.
Delistings and Listing ChangesRegulatory Filings and Compliance
System1 Faces NYSE Compliance Challenge
Negative
Jan 10, 2025
System1, Inc. received a notification from the New York Stock Exchange (NYSE) regarding non-compliance with its listing standards, as the average closing price of its Class A Common Stock fell below $1.00 over a 30-day period. The company plans to rectify this issue within a six-month timeframe by maintaining a stock price above $1.00, ensuring continued trading on the NYSE, and exploring alternatives to regain compliance, thus averting immediate delisting.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.