System1 (SST) AI Stock Analysis

• Market Cap: $56.41M
• Dividend Yield: N/A
• Average Volume (3M): 29.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.14
• Revenue Growth: -20.49%
• EPS Growth: 25.95%
• Country: US
• Employees: 300
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): -1.97
• Shares Outstanding: 8,045,545
• 10 Day Avg. Volume: 21,441
• 30 Day Avg. Volume: 29,656
• PEG Ratio: 0.15
• Price to Book (P/B): 7.78
• Price to Sales (P/S): 1.82
• P/FCF Ratio: -118.16
• Enterprise Value/Market Cap: 4.27
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 1.74
• Enterprise Value/Ebitda: -183.80
• 1Y Price Target: $8.00
• Price Target Upside: 72.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 38 Underperform
• Price Target: $4.00 ▼(-13.98% Downside)

System1's overall stock score is low due to significant financial challenges, bearish technical indicators, and unattractive valuation metrics. While there is potential for growth in the Product segment and AI initiatives, current financial and market conditions present substantial risks.

Positive Factors

Product Segment Growth

The growth in the Product segment, driven by higher-margin products, indicates a successful strategic shift towards more profitable areas, which can enhance long-term revenue stability.

AI Integration

AI integration and new product launches can drive innovation and efficiency, potentially leading to competitive advantages and sustained growth in the digital marketing sector.

International Expansion

Expanding internationally can diversify revenue streams and reduce dependency on domestic markets, enhancing long-term growth prospects and market reach.

Negative Factors

Marketing Revenue Decline

The significant decline in marketing revenue highlights vulnerability to changes in key partner products, impacting overall revenue and profitability.

Traffic Quality Issues

Issues with traffic quality can damage client trust and lead to financial and reputational risks, affecting long-term business relationships and revenue.

Cash Flow Challenges

Negative cash flow growth indicates difficulties in cash generation, which can limit investment in growth initiatives and strain financial stability over time.

System1 Business Overview & Revenue Model

Company Description

System1 (SST) is a data-driven marketing company that specializes in performance-based advertising and customer acquisition. Operating primarily in the digital marketing sector, System1 leverages proprietary technology and data analytics to optimize online advertising campaigns across various platforms. The company focuses on generating high-quality leads for its clients through its advanced algorithms and extensive network of web properties, delivering measurable results in a cost-effective manner.

How the Company Makes Money

System1 generates revenue primarily through its performance marketing model, where it earns money by driving traffic and leads to its partners on a pay-per-action basis. This means the company is compensated when users take specific actions, such as signing up for services or making purchases, as a direct result of their advertising efforts. Key revenue streams include lead generation, affiliate marketing, and partnerships with various brands looking to enhance their customer acquisition strategies. Additionally, System1 may monetize its owned web properties through display advertising and affiliate commissions, further diversifying its income sources.

System1 Financial Statement Overview

Summary

System1 faces significant financial challenges with declining revenue and profitability, negative net profit margin, and cash flow issues. Despite improved leverage, the company struggles with negative returns and weak cash conversion.

Income Statement

System1's income statement shows declining revenue with a negative growth rate of -4.94% TTM, indicating a challenging market environment. The gross profit margin has decreased from 44.30% in 2024 to 43.75% TTM, reflecting pressure on cost management. Net profit margin is negative at -22.43% TTM, highlighting ongoing profitability issues. The EBIT and EBITDA margins are also negative, suggesting operational inefficiencies.

Balance Sheet

The balance sheet reveals a significant reduction in debt, with a debt-to-equity ratio improving from 3.43 in 2024 to 0.44 TTM, indicating better leverage management. However, the return on equity remains negative at -96.10% TTM, pointing to challenges in generating returns for shareholders. The equity ratio is not explicitly calculated but suggests a need for stronger equity base relative to assets.

Cash Flow

Cash flow analysis shows a concerning free cash flow growth rate of -272.54% TTM, indicating cash generation issues. The operating cash flow to net income ratio is low at 0.08 TTM, suggesting weak cash conversion. However, the free cash flow to net income ratio is positive at 1.20 TTM, indicating some ability to cover net losses with free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	317.06M	343.93M	401.97M	664.94M	688.39M	475.98M
Gross Profit	138.70M	152.36M	46.72M	15.37M	86.64M	134.98M
EBITDA	-1.31M	14.00M	-4.48M	-427.61M	64.72M	52.92M
Net Income	-71.11M	-74.67M	-227.22M	33.00M	33.00M	63.76M
Balance Sheet
Total Assets	429.25M	459.13M	605.47M	1.16B	256.91M	518.55M
Cash, Cash Equivalents and Short-Term Investments	63.65M	63.61M	135.34M	8.90M	47.90M	843.64K
Total Debt	25.57M	274.98M	355.42M	422.55M	170.45M	179.97M
Total Liabilities	375.81M	374.13M	436.15M	689.78M	285.31M	82.39M
Stockholders Equity	58.20M	80.26M	135.28M	392.02M	-28.40M	436.17M
Cash Flow
Free Cash Flow	11.16M	-5.29M	-32.70M	-17.66M	-7.78M	40.42M
Operating Cash Flow	9.31M	-5.25M	-24.74M	-7.29M	-1.24M	46.55M
Investing Cash Flow	-6.14M	-6.25M	203.18M	-454.45M	-6.54M	68.17M
Financing Cash Flow	-18.13M	-63.96M	-74.07M	-27.73M	-34.59M	-128.07M

System1 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.65
• 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 4.65 is below the 20-day moving average (MA) of 6.19, below the 50-day MA of 7.20, and below the 200-day MA of 5.81, indicating a bearish trend. The MACD of -0.66 indicates Positive momentum. The RSI at 29.46 is Positive, neither overbought nor oversold. The STOCH value of 14.24 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
LZ	76 Outperform	$1.79B	81.19	16.96%	―	7.17%	-5.86%
DLHC	66 Neutral	$87.90M	19.28	4.12%	―	-10.30%	86.44%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ACTG	63 Neutral	$316.34M	―	0.90%	―	71.28%	-89.20%
TISI	45 Neutral	$73.87M	-1.40	-9999.00%	―	2.55%	6.88%
SPIR	41 Neutral	$304.32M	15.65	39.87%	―	-16.52%	―
SST	38 Underperform	$56.41M	-0.59	-99.29%	―	-20.49%	25.95%

System1 Corporate Events

System1 Inc. Navigates Challenges with Product Growth

System1 Inc.’s recent earnings call painted a picture of mixed fortunes, highlighting significant challenges in its Marketing segment while expressing optimism about the growth and innovation within its Product segment. The company is navigating through the turbulence caused by Google’s product changes and traffic quality issues, yet remains hopeful about its future prospects with AI integration and new product launches.

System1 Inc. Reports Mixed Q3 2025 Results

System1 Inc., a leading omnichannel customer acquisition marketing platform, operates across various consumer verticals such as shopping, travel, and search, leveraging AI and machine learning to enhance its services. In its third quarter of 2025, System1 reported a significant 31% decline in revenue year-over-year, totaling $61.6 million, while GAAP gross profit decreased by 8% to $22.8 million. Despite these declines, the company saw an improvement in its adjusted gross profit margin, which rose to 59% from 42% the previous year, indicating a strategic shift towards higher-margin products.

System1 Reports Q3 2025 Financial Challenges

On November 5, 2025, System1, Inc. released its supplemental financial information for the quarter ended September 30, 2025. The report highlights a decline in revenue and an increase in operating losses compared to previous quarters, reflecting ongoing financial challenges. The company’s marketing platform revenue and traffic acquisition costs were also detailed, indicating a focus on maintaining return on investment despite the financial setbacks.

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

System1 Inc. Earnings Call: Strong Products, Marketing Challenges

System1 Inc. Navigates Strong Product Performance Amidst Marketing Challenges

System1 Inc. Reports Mixed Q2 2025 Results

System1 Inc. is an omnichannel customer acquisition marketing platform that leverages advanced technology and data science to operate its Responsive Acquisition Marketing Platform (RAMP), focusing on privacy-centric solutions across multiple consumer verticals.

System1 Reports Q2 2025 Financial Results

On August 7, 2025, System1, Inc. released its supplemental financial information for the quarter ending June 30, 2025, revealing a net loss from continuing operations of $21.54 million. Despite the loss, the company’s marketing platform revenue showed resilience, with a return on traffic acquisition costs remaining stable, indicating ongoing efforts to manage operational expenses and optimize revenue generation.

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.