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Stem, Inc. (STEM)
:STEM
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Stem Inc
(NYSE:STEM)
35Underperform
Positive Factors
Customer Adoption
PowerTrack appears to be gaining traction with customers like Summit Ridge Energy in the U.S. and Neovolt in Hungary.
Revenue Model Shift
STEM is shifting further to a software-focused go-to-market strategy, which is expected to improve revenue predictability and margins.
Strategic Focus
The company provided further insight into its software and services strategy, which should improve profitability and make revenue more predictable over time.
Negative Factors
Cash Position
There is concern about the company's cash balance, as the year-end finished at $52 million, leaving no room for error.
Competitive Pressure
Stem, Inc. faces competition from OEMs and needs to prove the viability of its service and software offerings against more vertically integrated competitors.
Financial Performance
The updated EBITDA estimate for 2025 is significantly reduced, indicating potential challenges in financial performance.
Stem Inc (STEM) vs. S&P 500 (SPY)
Market Cap
$55.45M
Dividend YieldN/A
Average Volume (3M)4.75M
Price to Earnings (P/E)―
Beta (1Y)2.39
Revenue Growth-68.67%
EPS Growth-484.48%
CountryUS
Employees569
SectorTechnology
Sector Strength42
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-5.27
Shares Outstanding164,149,720
10 Day Avg. Volume2,630,868
30 Day Avg. Volume4,749,853
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.48
Price to Cash Flow (P/CF)-1.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$0.45Price Target Upside32.35% Upside
Rating ConsensusHold
Number of Analyst Covering4
Stem Inc Business Overview & Revenue Model
Company DescriptionStem, Inc. operates as a digitally connected and intelligent energy storage network provider in the United States and internationally. It offers energy storage systems sourced from original equipment manufacturers (OEMs). The company also provides Athena, an artificial intelligence platform, which offers battery hardware and software-enabled services to operate the energy storage systems. In addition, it offers system design and engineering services, supply chain management, energy storage value stream optimization, warranty and preventive maintenance plan management, operation and maintenance reporting, and program enrollment and incentive management services. The company serves commercial and industrial enterprises, independent power producers, renewable project developers, and utilities and grid operators. Stem, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.
How the Company Makes MoneyStem Inc makes money through the sale and deployment of its energy storage systems and the licensing of its Athena software platform. The company's revenue model is built on both direct sales and long-term service agreements with commercial, industrial, and utility customers. Key revenue streams include hardware sales from energy storage units and recurring revenue from software subscriptions and energy management services. Significant partnerships with renewable energy providers and utility companies also contribute to its earnings, enabling Stem to expand its market reach and enhance its service offerings.
Stem Inc Financial Statement Overview
Summary
Stem Inc displays significant financial challenges across all verticals. The company is struggling with profitability, as evidenced by negative margins and declining revenue. Its balance sheet is weak, with negative equity and high liabilities. Cash flow metrics reflect operational inefficiencies and reliance on external financing. Overall, the financials suggest high risk and instability.Income Statement
Stem Inc has experienced a significant decline in both revenue and profitability. The gross profit margin and net profit margin are negative, which indicates that the company is unable to cover its costs of goods sold and operating expenses. Additionally, the EBIT and EBITDA margins are also negative, reflecting operational inefficiencies and a challenge in achieving profitability. The revenue growth rate has fluctuated significantly, suggesting instability in revenue streams.15
Very Negative
Balance Sheet
The company has a negative stockholders' equity, which is a major concern as it indicates more liabilities than assets. The debt-to-equity ratio cannot be calculated due to negative equity, highlighting financial instability. The equity ratio is also negative, further emphasizing the financial distress. The return on equity (ROE) is negative, consistent with the company's net losses, suggesting that it is not generating positive returns for its shareholders.20
Very Negative
Cash Flow
Stem Inc's cash flow situation is concerning, with negative operating and free cash flows indicating cash burn. The free cash flow growth rate is negative, and both the operating cash flow to net income ratio and free cash flow to net income ratio are poor, demonstrating inefficiencies in cash generation and utilization. The company is heavily reliant on external financing to meet its cash requirements.25
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 144.58M | 461.51M | 362.98M | 127.37M | 36.31M | Gross Profit |
| -11.06M | 3.67M | 33.09M | 1.25M | -3.91M | EBIT |
| -839.46M | -179.31M | -131.12M | -83.07M | -49.39M | EBITDA |
| -790.40M | -79.17M | -87.68M | -62.99M | -116.99M | Net Income Common Stockholders |
| -854.01M | -140.41M | -124.05M | -119.50M | -156.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 56.30M | 113.59M | 249.98M | 920.79M | 6.94M | Total Assets |
| 437.36M | 1.36B | 1.42B | 1.19B | 205.85M | Total Debt |
| 539.26M | 537.04M | 460.47M | 330.41M | 106.28M | Net Debt |
| 482.96M | 431.66M | 372.57M | -417.37M | 99.33M | Total Liabilities |
| 835.19M | 930.30M | 869.73M | 524.00M | 383.26M | Stockholders Equity |
| -398.37M | 426.20M | 551.63M | 667.83M | -177.41M |
| Cash Flow | Free Cash Flow | |||
| -48.42M | -225.61M | -126.90M | -111.44M | -45.71M | Operating Cash Flow |
| -36.65M | -207.38M | -106.03M | -101.27M | -33.67M | Investing Cash Flow |
| -3.52M | 135.73M | -544.37M | -185.23M | -12.04M | Financing Cash Flow |
| -8.44M | 90.24M | -9.27M | 1.03B | 40.29M |
Stem Inc Technical Analysis
Negative
0.34
Price Trends
0.50
Negative
0.50
Negative
0.62
Negative
Market Momentum
-0.04
Positive
37.27
Neutral
9.40
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEM, the sentiment is Negative. The current price of 0.34 is below the 20-day moving average (MA) of 0.41, below the 50-day MA of 0.50, and below the 200-day MA of 0.62, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 37.27 is Neutral, neither overbought nor oversold. The STOCH value of 9.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STEM.
Stem Inc Risk Analysis
Stem Inc disclosed 58 risk factors in its most recent earnings report. Stem Inc 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
Stem Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.66B | 10.80 | 17.62% | ― | 26.75% | 55.24% | |
68 Neutral | $8.22B | 84.52 | 11.30% | ― | -41.92% | -76.24% | |
57 Neutral | $20.94B | 10.43 | -13.41% | 2.52% | 4.53% | -23.34% | |
53 Neutral | $572.41M | 16.13 | 1.34% | ― | -21.68% | -99.75% | |
51 Neutral | $951.10M | ― | -116.01% | ― | -68.86% | -4917.87% | |
46 Neutral | $1.33B | ― | -73.12% | ― | -9.83% | -71.44% | |
35 Underperform | $55.45M | ― | -6139.13% | ― | -68.67% | -484.48% |
* Technology Sector Average
Performance Comparison
STEM
Stem Inc
0.34
-1.68
-83.17%
CSIQ
Canadian Solar
9.06
-10.37
-53.37%
ENPH
Enphase Energy
62.52
-56.08
-47.28%
FSLR
First Solar
129.82
-36.91
-22.14%
SEDG
SolarEdge Technologies
16.83
-51.56
-75.39%
RUN
Sunrun
6.78
-5.63
-45.37%
Stem Inc Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -26.09% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with promising growth and high margins in the software segment, particularly with PowerTrack, but was offset by a significant decline in total revenue, operational challenges, and adjustments to backlog. Efforts to reduce costs and focus on high-margin business were positive, yet concerns about NYSE compliance and financial impairments were notable.Highlights
PowerTrack Software Success
PowerTrack has become the standard for 13 of the top 16 commercial and industrial solar asset owners in the U.S., with significant international opportunities, including a new deal with Neovolt in Hungary covering 484 megawatts.
High Gross Margins
PowerTrack software achieves 70% to 80% gross margins, with associated professional services and edge devices also contributing high margins.
Cost Reduction Initiatives
The company plans to reduce its cost structure by more than 20% in 2025, beyond the 15% reduction already achieved, aiming at operational efficiencies and streamlined corporate structure.
2025 Guidance on Revenue Mix
Expected 2025 revenue of $125 million to $175 million, with $120 million to $140 million from high-margin software, edge device, and services revenue, indicating a focus on recurring, high-margin business.
Lowlights
Decline in Total Revenue
Total revenue decreased significantly year-over-year due to reduced hardware sales, despite a 6% increase in software revenue.
Operational Challenges
The company faced a one-time impairment of deferred services and other one-time adjustments totaling $38.7 million, impacting financial results.
Backlog Adjustments
Contracted backlog and CARR were down sequentially, with significant adjustments to backlog due to repricing of OEM hardware and elimination of delayed projects.
NYSE Compliance Issue
The company received a notice from the NYSE for non-compliance with listing standards due to a low share price, necessitating a potential reverse stock split.
Company Guidance
In the fourth quarter 2024 earnings call for Stem, Inc., the company provided guidance for 2025, focusing on a strategic shift towards software and services revenue. They anticipate recognizing revenue between $125 million and $175 million, with $120 million to $140 million expected from high-margin software, edge devices, and services, and up to $35 million from battery hardware resales. The company projects non-GAAP gross margins to be between 30% and 40%, and aims for adjusted EBITDA ranging from negative $10 million to positive $5 million. Operating cash flow is expected to be between $0 million and $15 million. Stem also plans to reduce run-rate cash operating expenses by more than 20% during 2025 relative to their 2024 exit rate. Additionally, they forecast 15% growth in Annual Recurring Revenue (ARR), targeting between $55 million and $65 million by year-end 2025.Stem Inc Corporate Events
Executive/Board Changes
Stem Inc Appoints Two New Board Directors
Neutral
Mar 18, 2025
On March 13, 2025, Stem, Inc. announced the appointment of two new directors to its Board, effective March 17, 2025. Mr. Krishna Shivram and Mr. Vasudevan Guruswamy bring extensive experience in corporate finance, energy, digital technology, and software industries, enhancing the company’s strategic direction and governance.
Executive/Board Changes
Stem Inc Announces Board Member Resignation
Neutral
Feb 25, 2025
On February 25, 2025, Gerard Cunningham announced his resignation from the Board of Directors of Stem, Inc., effective February 28, 2025, due to personal reasons. His departure was not due to any disagreements with the company’s operations, policies, or practices, indicating a smooth transition without internal conflicts.
Executive/Board Changes
Jane Woodward Resigns from Stem Inc Board
Neutral
Jan 21, 2025
On January 17, 2025, Jane Woodward notified the Board of Directors and the Corporate Secretary of Stem, Inc. of her resignation from the Board, effective January 31, 2025, due to personal reasons. Her resignation was not due to any disagreements with the company or its operations, indicating stability within the company’s governance structure.
Executive/Board ChangesBusiness Operations and Strategy
Stem Inc Appoints New CEO to Strengthen Leadership
Positive
Jan 16, 2025
Stem, Inc. announced that its board has appointed Arun Narayanan as the new CEO, effective January 27, 2025, succeeding interim CEO David Buzby who will continue as the non-executive Chair of the Board. Mr. Narayanan, previously CEO of RES Digital Solutions, brings extensive experience from his roles at Anglo American plc and SLB. His appointment includes a comprehensive compensation package with base salary, bonuses, and long-term incentives, reflecting the company’s strategic move to strengthen its leadership. This transition is expected to bolster Stem, Inc.’s position in the industry and potentially impact stakeholders positively.
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.