System1 (SST) AI Stock Analysis

• Market Cap: $34.07M
• Dividend Yield: N/A
• Average Volume (3M): 126.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.58
• Revenue Growth: -19.84%
• EPS Growth: 49.40%
• Country: US
• Employees: 300
• Sector: Industrials
• Sector Strength: 95
• Industry: Specialty Business Services
• EPS (TTM): -0.17
• Shares Outstanding: 75,178,440
• 10 Day Avg. Volume: 97,427
• 30 Day Avg. Volume: 126,570
• PEG Ratio: -0.06
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.28
• Enterprise Value/Market Cap: 7.42
• Enterprise Value/Revenue: 0.17
• Enterprise Value/Gross Profit: 4.66
• Enterprise Value/Ebitda: 6.98
• 1Y Price Target: $5.00
• Price Target Upside: 1288.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 47 Neutral
• Price Target: $0.50 ▲(38.89%Upside)

System1's stock score is influenced by its financial instability, characterized by declining revenue and high leverage. Technical analysis shows short-term momentum but long-term weakness. The earnings call provided some positive highlights, but the overall revenue decline and uncertainties due to external factors like Google's policy changes contribute to a cautious outlook.

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 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 facing significant financial challenges, including declining revenue, persistent losses, and high leverage. Negative margins and cash flows highlight profitability issues, necessitating urgent measures for financial stability and 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.

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.

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.

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
274.98M	355.42M	422.55M	450.00K	179.97M
	Net Debt
211.37M	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

• Technical Analysis Sentiment: Negative
• Last Price: 0.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 0.36 is below the 20-day moving average (MA) of 0.42, below the 50-day MA of 0.39, and below the 200-day MA of 0.79, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 43.69 is Neutral, neither overbought nor oversold. The STOCH value of 10.66 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
SGRP	67 Neutral	$24.50M	2.10	-11.99%	―	-12.74%	751.07%
Sector *	65 Neutral	$4.45B	12.15	5.28%	248.12%	4.08%	-12.23%
NTIP	50 Neutral	$28.56M	―	-5.44%	8.00%	-87.89%	-44.93%
OMEX	48 Neutral	$24.00M	―		―	-2.44%	―
SST	47 Neutral	$34.07M	―	-80.45%	―	-19.84%	49.40%
SMX		$5.86M	―	-352.74%	―	―	―
LICN		$3.48M	―		―	―	―

System1 Corporate Events

System1 Approves Base Salary for President Ursini

On May 22, 2025, System1, Inc. announced that its Compensation Committee approved a base salary of $450,000 per annum for Charles Ursini, the company’s President and Chief Operating Officer, effective May 19, 2025. Previously, Mr. Ursini did not receive a base salary for his role, but he will continue to receive the same benefits as other employees, such as medical and dental coverage.

The most recent analyst rating on (SST) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.

System1 Releases Q1 2025 Financial Information

On May 6, 2025, System1, Inc. released supplemental financial information for the quarter ending March 31, 2025, on its website. The company also made available an investor presentation, which may be used for future investor engagements. This release provides stakeholders with detailed insights into the company’s financial performance and strategic positioning, potentially impacting investor perceptions and market positioning.

System1 Board Restructures After Director Resignations

On April 15, 2025, Dexter Fowler and Jennifer Prince resigned from the Board of Directors of System1, Inc., with Fowler serving on the Nominating & Corporate Governance Committee and Prince on the Compensation Committee. Their resignations were not due to any disagreements with the company. Following their departure, the Board decided on April 17, 2025, to reduce its size from eleven to nine members and reassigned CEO Michael Blend from a Class III to a Class I director to maintain balance among the board’s classes.

System1 Releases Q4 2024 Financial Information

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.