Stem Inc (STEM) AI Stock Analysis

• Market Cap: $186.37M
• Dividend Yield: N/A
• Average Volume (3M): 264.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.32
• Revenue Growth: -56.74%
• EPS Growth: 96.59%
• Country: US
• Employees: 569
• Sector: Utilities
• Sector Strength: 65
• Industry: Software - Infrastructure
• EPS (TTM): -1.79
• Shares Outstanding: 8,387,658
• 10 Day Avg. Volume: 345,735
• 30 Day Avg. Volume: 264,574
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.05
• Enterprise Value/Revenue: 2.45
• Enterprise Value/Gross Profit: 14.12
• Enterprise Value/Ebitda: -1.89
• 1Y Price Target: $12.75
• Price Target Upside: -34.31% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 54 Neutral
• Price Target: $14.50 ▼(-25.30% Downside)

Stem Inc's overall stock score is primarily influenced by its financial performance challenges, including negative equity and cash flow issues. However, the positive sentiment from the earnings call and strong technical indicators provide some optimism. The valuation remains a concern due to the negative P/E ratio and lack of dividend yield.

Positive Factors

Revenue Growth

The 13% YoY revenue growth indicates strong market demand and successful product adoption, supporting long-term business expansion.

Debt Refinancing

Reducing debt by $200 million enhances financial stability and extends debt maturity, improving long-term liquidity and flexibility.

New Product Offerings

New product offerings in storage and utility markets diversify revenue streams and strengthen competitive positioning.

Negative Factors

Negative Equity

Negative equity indicates financial instability, posing risks to long-term viability and limiting growth opportunities.

Operating Cash Flow Challenges

Negative operating cash flow limits the company's ability to reinvest in growth and manage financial obligations effectively.

Profitability Challenges

Sustained profitability challenges hinder long-term financial health and may affect the company's ability to compete effectively.

Stem Inc Business Overview & Revenue Model

Company Description

Stem Inc (STEM) is a leading provider of energy storage solutions, specializing in advanced artificial intelligence (AI) technology to optimize energy management for commercial and industrial enterprises. The company operates in the renewable energy sector, focusing on integrating energy storage systems with solar and other renewable sources to enhance energy efficiency, reduce costs, and support sustainability initiatives. Stem's core products include its AI-driven energy storage systems, software solutions for energy management, and various services that facilitate the deployment and operation of energy storage projects.

How the Company Makes Money

Stem Inc generates revenue primarily through the sale and installation of energy storage systems, which are marketed to businesses looking to optimize their energy consumption and reduce costs. The company also benefits from software licensing fees for its AI-driven energy management platform, which provides customers with insights and analytics to manage their energy usage effectively. Additional revenue streams include maintenance and support services for installed systems, as well as potential participation in energy markets where they can provide ancillary services like demand response. Significant partnerships with renewable energy developers and utilities enhance their market reach and facilitate project financing, contributing to their overall earnings.

Stem Inc Financial Statement Overview

Summary

Stem Inc is experiencing growth in revenue but continues to face significant profitability and financial stability challenges. The negative equity and high leverage pose substantial risks, while cash flow issues further complicate the financial outlook. The company needs to focus on improving operational efficiency and reducing debt to enhance its financial health.

Income Statement

Stem Inc has shown some revenue growth, with a TTM revenue growth rate of 2.89%. However, the company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin has improved to 17.37% in the TTM, but the company still faces significant challenges in achieving positive net income.

Balance Sheet

The balance sheet reveals a concerning financial structure with negative stockholders' equity and a high debt-to-equity ratio of -1.51 in the TTM. This indicates financial instability and potential risks in leveraging. Return on equity is slightly positive at 6.38%, but this is due to negative equity, which is not a sustainable position.

Cash Flow

Cash flow analysis shows negative operating and free cash flows, although there is a slight improvement in free cash flow growth at 6.72% in the TTM. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is above 1, suggesting that free cash flow is higher than net income, but this is not due to operational efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	156.00M	144.58M	461.51M	362.98M	127.37M	36.31M
Gross Profit	27.10M	-11.06M	3.67M	33.09M	1.25M	-3.91M
EBITDA	-202.09M	-790.40M	-79.17M	-87.68M	-62.99M	-116.99M
Net Income	-21.91M	-854.01M	-140.41M	-124.05M	-101.21M	-156.12M
Balance Sheet
Total Assets	379.22M	437.36M	1.36B	1.42B	1.19B	205.85M
Cash, Cash Equivalents and Short-Term Investments	40.79M	56.30M	113.59M	249.98M	920.79M	6.94M
Total Debt	321.54M	542.02M	537.04M	463.05M	331.65M	106.28M
Total Liabilities	592.70M	835.19M	930.30M	869.73M	524.00M	383.26M
Stockholders Equity	-213.48M	-398.37M	426.20M	551.63M	667.83M	-177.41M
Cash Flow
Free Cash Flow	-41.91M	-48.42M	-225.61M	-126.90M	-111.44M	-45.71M
Operating Cash Flow	-36.88M	-36.65M	-207.38M	-106.03M	-101.27M	-33.67M
Investing Cash Flow	-9.66M	-3.52M	135.73M	-544.37M	-185.23M	-12.04M
Financing Cash Flow	-2.57M	-8.44M	90.24M	-9.27M	1.03B	40.29M

Stem Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEM, the sentiment is Positive. The current price of 19.41 is above the 20-day moving average (MA) of 16.23, above the 50-day MA of 15.19, and above the 200-day MA of 11.20, indicating a bullish trend. The MACD of 1.56 indicates Negative momentum. The RSI at 61.22 is Neutral, neither overbought nor oversold. The STOCH value of 77.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STEM.

Stem Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YEXT	68 Neutral	1.07B	-68.87	4.88%	―	13.51%	―
BLZE	66 Neutral	590.99M	-10.98	-62.52%	―	19.08%	28.99%
CCCS	64 Neutral	6.06B	4,380.95	1.31%	―	9.60%	-90.58%
PGY	60 Neutral	2.69B	-9.07	-76.58%	―	26.24%	-94.81%
STEM	54 Neutral	$186.37M	―	-6139.13%	―	-56.74%	96.59%
CGNT	51 Neutral	606.59M	-132.81	-6.08%	―	―	―
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Stem Inc Corporate Events

Stem Inc Issues Press Release on Compliance

On August 7, 2025, Stem Inc issued a press release related to its operations and financial condition. The release, furnished with Form 8-K, highlights the company’s compliance with regulatory requirements but does not provide specific details about its impact on stakeholders or industry positioning.

Stem Inc Announces New CFO Appointment

On July 2, 2025, Stem, Inc. announced a significant leadership change with the resignation of Mr. Doran Hole as Chief Financial Officer, effective July 17, 2025. Mr. Hole will transition to an advisory role until July 31, 2025, to ensure a smooth handover. Concurrently, Mr. Brian Musfeldt has been appointed as the new CFO, effective July 17, 2025. Mr. Musfeldt brings extensive experience from his previous roles at ikeGPS and Also Energy, Inc., among others. His compensation package includes a base salary, bonuses, and stock options, reflecting the company’s commitment to aligning executive incentives with long-term performance goals.

Stem Inc’s Strategic Exchange Agreement on June 2025

On June 27, 2025, Stem, Inc. entered into a privately negotiated exchange agreement with certain holders of its 2028 and 2030 Green Convertible Senior Notes. The company exchanged a significant amount of these notes and cash for new Senior Secured PIK Toggle Notes due 2030 and warrants for common stock. This strategic financial maneuver is expected to impact the company’s liquidity and capital structure, potentially affecting its market positioning and stakeholder interests.

Stem Inc Approves 1-for-20 Reverse Stock Split

Stem Inc.’s Board of Directors has approved a reverse stock split at a ratio of 1-for-20 and reduced the total number of authorized shares from 500 million to 250 million, effective June 23, 2025. This move is expected to impact the company’s stock trading and equity incentive plans, with the stock commencing trading on a split-adjusted basis on the New York Stock Exchange on the effective date.

Stem Inc’s Key Proposals Approved at Annual Meeting

At the 2025 Annual Meeting held on June 4, Stem, Inc.’s stockholders approved several key proposals, including the election of two Class I directors, an amendment to increase shares in the 2024 Equity Incentive Plan by 4,000,000, and a reverse stock split. These decisions are expected to impact the company’s operational flexibility and market positioning positively. Additionally, the stockholders ratified Deloitte & Touche LLP as the independent auditor for 2025, and approved amendments to the company’s Certificate of Incorporation, which include a reduction in the total number of authorized shares.