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Stem Inc
(NYSE:STEM)
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Rating:50Neutral
Price Target:
$8.00
▼(-25.99% Downside)
Action:Reiterated
Date:06/04/26
The score is held back primarily by weak financial performance—negative equity, meaningful debt, and poor earnings-to-cash conversion with TTM negative operating/free cash flow. The earnings call improves the outlook with reaffirmed guidance, strong gross margin, and positive adjusted EBITDA trend, while technical signals are neutral and the very low P/E is supportive but less reliable given earnings quality concerns.
Positive Factors
Gross Margin Expansion
Sustained gross-margin expansion driven by a higher mix of software, services and edge hardware versus low-margin battery resales improves long-run profitability per dollar of revenue. This structural mix shift supports durable operating leverage and better cash conversion potential as software ARR scales.
Negative Factors
Weak Balance Sheet
Persistent negative equity and material debt relative to assets present solvency and financing risks, reducing flexibility to fund growth or weather shocks. This structural weakness can raise borrowing costs, limit strategic investments, and increase dilution risk if equity financing is required to shore up the balance sheet.
Read all positive and negative factors
Positive Factors
Negative Factors
Gross Margin Expansion
Sustained gross-margin expansion driven by a higher mix of software, services and edge hardware versus low-margin battery resales improves long-run profitability per dollar of revenue. This structural mix shift supports durable operating leverage and better cash conversion potential as software ARR scales.
Read all positive factors
Stem Inc Key Performance Indicators (KPIs)
Any
Storage AUM
Measures the total assets under management in the storage sector, indicating the scale and growth potential of this business area.
Measures the total assets under management in the storage sector, indicating the scale and growth potential of this business area.
Data provided by:
The Fly
The FlyStem Inc (STEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$70.31M
Dividend YieldN/A
Average Volume (3M)186.34K
Price to Earnings (P/E)0.5
Beta (1Y)2.35
Revenue Growth0.74%
EPS GrowthN/A
CountryUS
Employees569
SectorUtilities
Sector Strength65
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)17.35
Shares Outstanding8,956,953
10 Day Avg. Volume141,612
30 Day Avg. Volume186,339
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)-0.50
Price to Sales (P/S)0.80
P/FCF Ratio18.29
Enterprise Value/Market Cap5.14
Enterprise Value/Revenue2.37
Enterprise Value/Gross Profit6.51
Enterprise Value/Ebitda1.65
Forecast
1Y Price Target
$10.50Price Target Upside-2.87% Downside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)-6.84
Revenue Forecast (FY)$155.24M
Stem Inc Business Overview & Revenue Model
Company Description
Stem, Inc. operates internationally as a prominent provider of intelligent, digitally interconnected energy storage networks. The company delivers energy storage systems, which it sources from original equipment manufacturers (OEMs). Central to it...
How the Company Makes Money
Stem primarily generates revenue from two broad sources: (1) software and services and (2) hardware/project-related activities tied to energy storage deployments. On the software side, Stem sells access to its AI-enabled optimization and analytics...
Stem Inc Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call emphasized significant operational improvements, margin expansion, recurring software growth, product and M&A momentum, and reaffirmed full-year guidance. Offsetting items include a short-term revenue decline driven by no battery hardware resales in Q1, negative operating cash flow due to seasonal working capital timing, and managed services pressure from a supplier bankruptcy. Overall the positives around profitability, margins, PowerTrack growth, structural cost reductions and strategic product initiatives materially outweigh the near-term headwinds.Positive Updates
Positive Adjusted EBITDA Streak and Profitability Milestone
Adjusted EBITDA of $2 million in Q1 2026, representing the fourth consecutive quarter of positive adjusted EBITDA and the company's first-ever positive adjusted EBITDA in a first fiscal quarter. This is a $7 million improvement versus Q1 2025 (from negative $5 million to positive $2 million), demonstrating operating leverage.
Negative Updates
Total Revenue Decline
Total revenue in Q1 2026 was $29 million, down 11% year-over-year from $32 million in Q1 2025. The decline was entirely attributable to the absence of battery hardware resales in the quarter.
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Q1-2026 Updates
Positive
Negative
Positive Adjusted EBITDA Streak and Profitability Milestone
Adjusted EBITDA of $2 million in Q1 2026, representing the fourth consecutive quarter of positive adjusted EBITDA and the company's first-ever positive adjusted EBITDA in a first fiscal quarter. This is a $7 million improvement versus Q1 2025 (from negative $5 million to positive $2 million), demonstrating operating leverage.
Read all positive updates
Company Guidance
Management reaffirmed full‑year 2026 guidance: total revenue $140–$190M (software, services & edge hardware $130–$150M; up to $40M of battery hardware resales, expected weighted to H2), non‑GAAP gross margin 40%–50% (Q1 non‑GAAP gross margin was 52%, GAAP 38%), adjusted EBITDA $10–$15M (Q1 adjusted EBITDA $2M), operating cash flow $0–$10M (Q1 operating cash flow –$8M; cash $37M at quarter end), and year‑end ARR $65–$70M (Q1 ARR $61.2M; CARR $67M); additional Q1 metrics included $29M revenue, $27M bookings, $23M backlog, PowerTrack ARR up 2% sequentially (12% Y/Y), PowerTrack software revenue +16% Y/Y, solar AUM 37.5 GW and storage AUM 1.7 GWh, and management expects margins to compress toward the midpoint of the gross‑margin range as battery resales ramp while cash flow improves as bookings and billings increase.Stem Inc Financial Statement Overview
Summary
Income Statement
45
Neutral
Balance Sheet
22
Negative
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 152.75M | 156.27M | 144.58M | 461.51M | 362.98M | 127.37M |
| Gross Profit | 55.48M | 59.96M | -11.06M | 3.67M | 33.09M | 1.25M |
| EBITDA | 219.54M | 207.18M | -790.40M | -79.17M | -87.68M | -62.99M |
| Net Income | 143.84M | 137.76M | -854.01M | -140.41M | -124.05M | -101.21M |
Balance Sheet | ||||||
| Total Assets | 281.88M | 308.89M | 437.36M | 1.36B | 1.42B | 1.19B |
| Cash, Cash Equivalents and Short-Term Investments | 36.59M | 48.91M | 56.30M | 113.59M | 249.98M | 920.79M |
| Total Debt | 329.07M | 325.25M | 542.02M | 537.04M | 463.05M | 346.93M |
| Total Liabilities | 547.76M | 557.95M | 835.19M | 930.30M | 869.73M | 524.00M |
| Stockholders Equity | -266.26M | -249.44M | -398.37M | 426.20M | 551.63M | 667.83M |
Cash Flow | ||||||
| Free Cash Flow | -9.72M | 6.86M | -48.42M | -225.61M | -110.13M | -111.44M |
| Operating Cash Flow | -9.99M | 6.86M | -36.65M | -207.38M | -106.03M | -101.27M |
| Investing Cash Flow | -4.55M | -6.76M | -3.52M | 135.73M | -543.83M | -185.23M |
| Financing Cash Flow | -7.35M | -7.41M | -8.44M | 90.24M | -9.81M | 1.03B |
Stem Inc Technical Analysis
Neutral
10.81
Price Trends
9.05
Negative
9.76
Negative
14.20
Negative
Market Momentum
-0.38
Negative
45.34
Neutral
54.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEM, the sentiment is Neutral. The current price of 10.81 is above the 20-day moving average (MA) of 7.74, above the 50-day MA of 9.05, and below the 200-day MA of 14.20, indicating a neutral trend. The MACD of -0.38 indicates Negative momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 54.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $7.55B | 26.36 | 15.60% | 0.67% | 3.70% | -14.17% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
56 Neutral | $5.68B | 41.82 | 13.28% | ― | -1.64% | -6.91% | |
55 Neutral | $3.13B | -54.45 | -10.50% | ― | 10.93% | -73.80% | |
50 Neutral | $70.31M | 0.45 | -59.64% | ― | 0.74% | ― | |
46 Neutral | $123.97M | -1.04 | -120.57% | ― | 719.35% | ― |
* Utilities Sector Average
STEM
Stem Inc
7.85
-1.02
-11.50%
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Stem Inc Corporate Events
Executive/Board ChangesShareholder Meetings
Stem Inc Shareholders Back Directors and Equity Plan
Positive
Jun 3, 2026
Stem, Inc. held its 2026 Annual Meeting of Stockholders on June 3, 2026, with approximately 53% of eligible shares represented, and shareholders elected three Class II directors to serve until the 2029 annual meeting. Investors also ratified RSM U...
Financial DisclosuresRegulatory Filings and Compliance
Stem Inc Issues Regulation FD Disclosure on Financial Status
Neutral
May 6, 2026
On May 6, 2026, Stem Inc. disclosed that it had issued a press release and made it available as an exhibit to a Form 8-K, providing additional information about the company’s situation. The disclosure clarifies that this information is furni...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.