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Stem Inc (STEM)
NYSE:STEM
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Stem Inc
(NYSE:STEM)
Rating:46Neutral
Price Target:―
Positive Factors
Financial Performance
Stem reported solid results, generating positive operating cash flow for the first time.
Software Strategy
The company's software-centric strategy is beginning to show results, with strong interest in its PowerTrack offering.
Negative Factors
Cash Flow Concerns
There is concern about the company's cash balance, as the year-end finished at $52 million, leaving no room for error.
Earnings Guidance
The FY 2025 guidance for Stem, Inc. is considered underwhelming with limited growth potential in software and service revenue.
Market Competition
Stem, Inc. faces competition from OEMs and needs to prove the viability of its service and software offerings against more vertically integrated competitors.
Stock Valuation
There is potential for downward pressure on the stock following its planned reverse stock split.
Stem Inc (STEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$89.48M
Dividend YieldN/A
Average Volume (3M)4.74M
Price to Earnings (P/E)―
Beta (1Y)2.14
Revenue Growth-63.86%
EPS Growth-364.19%
CountryUS
Employees569
SectorTechnology
Sector Strength76
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.15
Shares Outstanding166,358,780
10 Day Avg. Volume3,640,955
30 Day Avg. Volume4,743,327
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)-0.20
Price to Sales (P/S)0.00
P/FCF Ratio-2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$0.50Price Target Upside-5.66% Downside
Rating ConsensusHold
Number of Analyst Covering5
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 Key Performance Indicators (KPIs)
Any
Storage AUM
Measures the total assets under management in energy storage, indicating the scale of operations and potential for future revenue from storage solutions.
Measures the total assets under management in energy storage, indicating the scale of operations and potential for future revenue from storage solutions.
Data provided by:
Main Street Data
Main Street DataStem Inc Financial Statement Overview
Summary
Stem Inc. faces significant financial hurdles across income, balance sheet, and cash flow aspects. Persistent losses, high leverage, and negative cash flows underscore the need for strategic realignment to achieve financial stability and growth. The company must address operational inefficiencies and reduce dependency on external financing to improve its financial health.Income Statement
Stem Inc. shows significant challenges in profitability with consistently negative net income and declining gross margins. Revenue growth is volatile, with recent TTM figures showing an increase, but past annual reports indicate fluctuation. EBIT and EBITDA margins are deeply negative, suggesting ongoing operational inefficiencies.30
Negative
Balance Sheet
The company's balance sheet reveals high leverage with a negative stockholders' equity, indicating potential solvency issues. The debt-to-equity ratio cannot be calculated due to negative equity, highlighting financial instability. The equity ratio is negative, reflecting liabilities exceeding assets.25
Negative
Cash Flow
Cash flow analysis indicates negative free cash flow, with operating cash flow also being negative, suggesting liquidity challenges. Although there is a slight improvement in operating cash flow relative to net income, the free cash flow remains a concern due to high capital expenditures.35
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 151.63M | 144.58M | 461.51M | 362.98M | 127.37M | 36.31M | Gross Profit |
| 25.91M | -11.06M | 3.67M | 33.09M | 1.25M | -3.91M | EBIT |
| -243.20M | -839.46M | -179.31M | -131.12M | -83.07M | -49.39M | EBITDA |
| -754.85M | -790.40M | -79.17M | -87.68M | -62.99M | -116.99M | Net Income Common Stockholders |
| -806.71M | -854.01M | -140.41M | -124.05M | -119.50M | -156.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 58.58M | 56.30M | 113.59M | 249.98M | 920.79M | 6.94M | Total Assets |
| 405.08M | 437.36M | 1.36B | 1.42B | 1.19B | 205.85M | Total Debt |
| 539.03M | 542.02M | 537.04M | 460.47M | 330.41M | 106.28M | Net Debt |
| 480.45M | 485.72M | 431.66M | 372.57M | -417.37M | 99.33M | Total Liabilities |
| 822.00M | 835.19M | 930.30M | 869.73M | 524.00M | 383.26M | Stockholders Equity |
| -417.46M | -398.37M | 426.20M | 551.63M | 667.83M | -177.41M |
| Cash Flow | Free Cash Flow | ||||
| -39.27M | -48.42M | -225.61M | -126.90M | -111.44M | -45.71M | Operating Cash Flow |
| -27.49M | -36.65M | -207.38M | -106.03M | -101.27M | -33.67M | Investing Cash Flow |
| -11.78M | -3.52M | 135.73M | -544.37M | -185.23M | -12.04M | Financing Cash Flow |
| -14.40M | -8.44M | 90.24M | -9.27M | 1.03B | 40.29M |
Stem Inc Technical Analysis
Negative
0.53
Price Trends
0.43
Positive
0.53
Negative
0.49
Negative
Market Momentum
0.03
Positive
49.91
Neutral
24.08
Neutral
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 0.53 is above the 20-day moving average (MA) of 0.51, above the 50-day MA of 0.43, and above the 200-day MA of 0.49, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 49.91 is Neutral, neither overbought nor oversold. The STOCH value of 24.08 is Neutral, 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 3 New Risks
1.
We may fail to qualify for continued listing on the NYSE, which could make it more difficult for our stockholders to transact in our shares and reduce the value of their stock. Q4, 2024
2.
Our common stock price has been, and may continue to be, subject to significant volatility. Q4, 2024
3.
We may not be able to implement our new strategy. Our failure to do so could adversely affect our business, financial condition, and results of operations. Q4, 2024
Stem Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $854.70M | ― | -18.61% | ― | 4.11% | -935.85% | |
66 Neutral | $6.03B | 650.00 | 0.46% | ― | 9.05% | ― | |
63 Neutral | $1.09B | ― | -77.37% | ― | 25.84% | -248.65% | |
63 Neutral | $290.42M | ― | -74.75% | ― | 21.81% | 28.80% | |
60 Neutral | $11.56B | 10.24 | -7.04% | 2.94% | 7.46% | -10.54% | |
57 Neutral | $753.38M | ― | -6.09% | ― | ― | ― | |
46 Neutral | $89.48M | ― | -6139.13% | ― | -63.86% | -364.19% |
* Technology Sector Average
Performance Comparison
STEM
Stem Inc
0.49
-0.87
-63.97%
YEXT
Yext
6.69
1.35
25.28%
CCCS
CCC Intelligent Solutions Holdings
8.66
-3.12
-26.49%
CGNT
Cognyte Software
10.70
3.28
44.20%
PGY
Pagaya Technologies Ltd
14.05
2.29
19.47%
BLZE
Backblaze
5.56
-1.14
-17.01%
Stem Inc Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 26.19%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant progress in revenue growth, software and storage performance, and strategic restructuring, with cost-saving measures enhancing profitability. However, challenges from organizational changes and product de-emphasis were noted.Q1-2025 Updates
Positive Updates
Record Revenue Growth
Total revenue increased by 27% year-over-year, driven by robust growth across the business.
Software Revenue Surge
Software revenue was up 17% compared to Q1 2024, reflecting strong performance from PowerTrack and increased storage software activations.
Gross Margin Achievement
A record GAAP gross margin of 32% and a near all-time high non-GAAP gross margin of 46% were achieved.
Positive Cash Flow
Generated $9 million of operating cash flow, marking the first quarter of positive operating cash flow.
Strategic Business Unit Realignment
Implemented a new structure with four distinct business units, each with full P&L responsibility, to drive strategic priorities.
Software and Storage Growth
Solar ARR increased by 10% sequentially and 24% year-over-year; storage ARR grew by 4% sequentially and 31% year-over-year.
Cost Savings Initiatives
Announced a 27% reduction in force expected to result in $30 million of annual cash cost savings, with $24 million realized in 2025.
Negative Updates
PowerBidder Pro De-emphasis
Made the decision to pause further development of PowerBidder Pro and Asset Performance Management, leading to a slight decline in storage AUM.
Organizational Challenges
Undergone significant organizational changes, including workforce reduction, which may create uncertainty and challenges among team members.
Company Guidance
In the first quarter of 2025, Stem, Inc. made notable progress in aligning its operations with strategic priorities, including implementing a new internal structure with four distinct business units: Software, Professional Services, Managed Services, and OEM Hardware. This restructuring is expected to enhance efficiency and optimize capital allocation, with each unit responsible for its financial performance, including metrics like EBITDA and cash flow. The company announced a 27% workforce reduction, anticipated to save $30 million annually and deliver a $24 million cash benefit within the year. Stem's focus on growing software revenue was evident, as solar Annual Recurring Revenue (ARR) increased by 24% year-over-year and storage ARR by 31%. The firm reported a record non-GAAP gross margin of 46% and achieved positive operating cash flow for the first time. Stem reaffirmed its 2025 guidance across all metrics, despite economic uncertainties, maintaining its strategic emphasis on software and services to drive profitability and growth.Stem Inc Corporate Events
Regulatory Filings and Compliance
Stem Inc Issues Press Release on April 29
Neutral
Apr 29, 2025
On April 29, 2025, Stem Inc issued a press release, which was included in their Form 8-K filing. The release is not considered filed for purposes of the Exchange Act or incorporated into any Securities Act filing unless specifically referenced.
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.
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.