System1 (SST) AI Stock Analysis

• Market Cap: $46.09M
• Dividend Yield: N/A
• Average Volume (3M): 29.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.33
• 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: 8,128,321
• 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: 5.23
• Enterprise Value/Revenue: 0.83
• Enterprise Value/Gross Profit: 1.95
• Enterprise Value/Ebitda: 9.11
• 1Y Price Target: $8.00
• Price Target Upside: 73.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: $4.00 ▼(-13.23% Downside)

System1's overall stock score is primarily impacted by its weak financial performance, with significant challenges in revenue and profitability. Technical indicators and valuation metrics further reflect a bearish outlook. Although there is some optimism from product growth and AI integration, the non-compliance notice from the NYSE adds additional risk.

Positive Factors

Product Segment Growth

The growth in the Product segment indicates resilience and potential for future revenue stability, driven by higher-margin products and increased user engagement.

AI Integration and New Product Launches

AI integration and new product launches can enhance operational efficiency and open new revenue streams, positioning the company for long-term growth.

International Expansion of CouponFollow

International expansion of CouponFollow can increase market reach and diversify revenue sources, strengthening the company's global presence.

Negative Factors

Marketing Revenue Decline

A significant decline in marketing revenue due to external factors like Google's product changes could impact overall financial health and growth prospects.

NYSE Non-Compliance Notice

Non-compliance with NYSE listing standards poses a risk to market positioning and could affect investor confidence and access to capital.

Traffic Quality Issues

Issues with traffic quality can lead to revenue loss and legal disputes, affecting the company's reputation and operational efficiency.

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 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 across its income statement, balance sheet, and cash flow. The company is experiencing declining revenues and profitability, with negative margins and growth rates. While leverage has improved, the overall financial health remains weak, with negative returns on equity and declining cash flows. The company needs to address operational inefficiencies and improve cash generation to stabilize its financial position.

Income Statement

System1's income statement reveals significant challenges. The company has experienced declining revenue over the past few years, with a negative revenue growth rate of -8.6% in the TTM period. Gross profit margins have decreased from 44.3% in 2024 to 43.7% in the TTM period, indicating pressure on profitability. The net profit margin is negative, reflecting ongoing losses. The EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.

Balance Sheet

The balance sheet shows a mixed picture. The debt-to-equity ratio has improved significantly in the TTM period to 0.44 from 3.43 in 2024, indicating reduced leverage. However, the return on equity remains negative, suggesting that the company is not generating sufficient returns on shareholders' equity. The equity ratio is relatively low, indicating potential financial vulnerability.

Cash Flow

Cash flow analysis reveals concerning trends. The free cash flow growth rate is negative at -32.9% in the TTM period, indicating declining cash generation. The operating cash flow to net income ratio is low, suggesting challenges in converting earnings into cash. Although the free cash flow to net income ratio is above 1, it is primarily due to negative net income, which is not a sustainable situation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	289.78M	343.93M	401.97M	664.94M	688.39M	475.98M
Gross Profit	123.78M	152.36M	46.72M	15.37M	86.64M	134.98M
EBITDA	26.45M	14.00M	-4.48M	-51.95M	64.72M	52.92M
Net Income	-66.02M	-74.67M	-227.22M	-367.45M	33.00M	63.76M
Balance Sheet
Total Assets	385.16M	459.13M	605.47M	1.16B	256.91M	518.55M
Cash, Cash Equivalents and Short-Term Investments	54.59M	63.61M	135.34M	8.90M	47.90M	843.64K
Total Debt	27.59M	274.98M	355.42M	422.55M	170.45M	179.97M
Total Liabilities	350.90M	374.13M	436.15M	689.78M	285.31M	82.39M
Stockholders Equity	42.68M	80.26M	135.28M	392.02M	-28.40M	436.17M
Cash Flow
Free Cash Flow	2.43M	-5.29M	-32.70M	-17.66M	54.17M	40.42M
Operating Cash Flow	7.26M	-5.25M	-24.74M	-7.29M	60.70M	46.55M
Investing Cash Flow	-6.39M	-6.25M	203.18M	-454.45M	-6.54M	68.17M
Financing Cash Flow	-18.12M	-63.96M	-74.07M	-27.73M	-34.59M	-128.07M

System1 Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.61
• 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 SST, the sentiment is Neutral. The current price of 4.61 is above the 20-day moving average (MA) of 4.17, below the 50-day MA of 4.72, and below the 200-day MA of 5.47, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 56.21 is Neutral, neither overbought nor oversold. The STOCH value of 70.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SST.

System1 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LZ	72 Outperform	$1.78B	80.55	16.96%	―	7.17%	-5.86%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ACTG	63 Neutral	$366.55M	76.46	0.90%	―	71.28%	-89.20%
DLHC	53 Neutral	$81.89M	60.49	1.22%	―	-12.99%	-81.86%
SPIR	47 Neutral	$284.47M	17.75	37.31%	―	-31.51%	―
SST	41 Neutral	$46.09M	-0.54	-99.29%	―	-20.49%	25.95%
TISI	38 Underperform	$64.92M	-1.21	-210.92%	―	3.73%	3.56%

System1 Corporate Events

System1 Faces NYSE Non-Compliance Notice

On December 8, 2025, System1, Inc. received a notice from the New York Stock Exchange (NYSE) indicating non-compliance with Section 802.01B of the NYSE Listed Company Manual due to its market capitalization and stockholder’s equity being below $50 million. The company has 18 months to address these deficiencies, with plans to submit a business plan by January 22, 2026, to regain compliance. This situation could impact System1’s operations and market positioning as it seeks to meet NYSE’s listing standards.

System1 Sees Major Shareholder Shift with Stock Sale

On December 1, 2025, Cannae Holdings, LLC, the largest individual shareholder of System1, Inc., completed the sale of 2,344,482 Class A shares of the company’s stock to Kenloch Holdings, LLC. This transaction was a privately negotiated off-market deal managed by Michael Blend, System1’s co-founder, CEO, and chairman. The sale, valued at approximately $9.98 million, was paid partly in cash and partly through a secured promissory note, indicating a shift in the company’s shareholder structure with potential implications for its management and strategic direction.

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.