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Stem Inc (STEM)
NYSE:STEM
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Stem Inc (STEM) AI Stock Analysis

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STEM

Stem Inc

(NYSE:STEM)

Rating:54Neutral
Price Target:
$14.50
▲(1.90% Upside)
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
Financial Performance
Stem reported solid results, generating positive operating cash flow for the first time.
Product 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.
Financial Guidance
The FY 2025 guidance for Stem, Inc. is considered underwhelming with limited growth potential in software and service revenue.
Stock Market Pressure
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)

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 generates revenue through the sale and deployment of its energy storage systems, which are integrated with its proprietary Athena software. The company charges its customers for the initial installation and ongoing software-as-a-service (SaaS) subscriptions that enable continuous energy optimization and data analytics. Additionally, Stem enters into strategic partnerships with utility companies and renewable energy developers to expand its market reach and drive further adoption of its solutions. Revenue is also derived from performance-based contracts where Stem earns fees based on the cost savings and efficiency gains delivered to its clients.

Stem Inc Key Performance Indicators (KPIs)

Any
Any
Storage AUM
Storage AUM
Measures the total assets under management in the storage sector, indicating the scale and growth potential of this business area.
Chart InsightsStem Inc.'s Storage AUM has shown robust growth, peaking in late 2024 before a slight dip. The latest earnings call highlights a strategic pivot towards high-margin software and services, which is crucial as hardware sales decline. Despite operational challenges and revenue setbacks, the focus on PowerTrack software, with its high gross margins, and cost reduction initiatives could stabilize financial performance. However, the company faces risks with NYSE compliance and backlog adjustments, necessitating careful navigation to maintain investor confidence.
Data provided by:Main Street Data

Stem Inc Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with significant achievements in revenue growth, software revenue, and debt refinancing. While the company faces challenges with operating cash flow, the strategic initiatives and new product offerings indicate a strong position for future growth.
Q2-2025 Updates
Positive Updates
Record Software Revenue and Positive Adjusted EBITDA
The company delivered record software revenue and achieved a positive adjusted EBITDA of $4 million for the quarter, representing a $15 million year-over-year improvement.
Total Revenue and ARR Growth
Reported total revenue was $38.4 million, up 13% year-over-year. Total ARR grew 3% sequentially and 22% year-over-year to $59 million.
Strategic Reduction in Force
Implemented a 35% reduction in personnel costs, which enabled the company to reduce cash OpEx year-over-year by nearly 40%.
Debt Refinancing
Completed a strategic debt exchange transaction, reducing the debt burden by approximately $200 million and extending the first debt maturity significantly.
New Software Offerings
Introduced PowerTrack EMS and PowerTrack Sage, expanding the company’s offerings into storage, hybrid assets, and utility scale markets.
Negative Updates
Operating Cash Flow Challenges
Operating cash flow was negative $21 million for the quarter, driven by working capital outflows and onetime payments related to the reduction in force.
Tracking to Low End of Operating Cash Flow Guidance
Although overall guidance was reiterated, the company is tracking towards the low end of the range for operating cash flow.
Company Guidance
During the second quarter of 2025, Stem Inc. demonstrated significant progress across multiple metrics, delivering a total revenue of $38.4 million, which marked a 13% year-over-year increase. The company reported a positive adjusted EBITDA of $4 million, representing a substantial $15 million improvement from the previous year. Total Annual Recurring Revenue (ARR) grew by 3% sequentially and 22% year-over-year to $59 million, indicating strong momentum in their recurring revenue base. Additionally, Stem achieved a 49% non-GAAP gross margin, reflecting the increasing mix of higher-margin software and services in their revenue base. The strategic reduction in personnel costs resulted in a 35% decrease in these costs, contributing to a 39% year-over-year reduction in cash operating expenses. Stem also completed a strategic debt exchange transaction, reducing its debt by approximately $200 million, which extended the maturity of most of its debt to five years. Despite headwinds from tariffs and policy uncertainties, the company reiterated its full-year 2025 guidance, anticipating tracking towards the high end for most metrics except operating cash flow, which is expected to be at the lower end of the range.

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
35
Negative
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
20
Very Negative
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
30
Negative
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue156.00M144.58M461.51M362.98M127.37M36.31M
Gross Profit27.10M-11.06M3.67M33.09M1.25M-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 Assets379.22M437.36M1.36B1.42B1.19B205.85M
Cash, Cash Equivalents and Short-Term Investments40.79M56.30M113.59M249.98M920.79M6.94M
Total Debt321.54M542.02M537.04M463.05M331.65M106.28M
Total Liabilities592.70M835.19M930.30M869.73M524.00M383.26M
Stockholders Equity-213.48M-398.37M426.20M551.63M667.83M-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-3.52M135.73M-544.37M-185.23M-12.04M
Financing Cash Flow-2.57M-8.44M90.24M-9.27M1.03B40.29M

Stem Inc Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price14.23
Price Trends
50DMA
12.55
Positive
100DMA
11.02
Positive
200DMA
10.52
Positive
Market Momentum
MACD
0.59
Positive
RSI
48.77
Neutral
STOCH
21.64
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 14.23 is below the 20-day moving average (MA) of 14.97, above the 50-day MA of 12.55, and above the 200-day MA of 10.52, indicating a neutral trend. The MACD of 0.59 indicates Positive momentum. The RSI at 48.77 is Neutral, neither overbought nor oversold. The STOCH value of 21.64 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

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
$1.10B-15.69%8.38%-278.88%
67
Neutral
$6.38B4,638.100.10%9.60%-90.58%
66
Neutral
$17.25B17.875.54%3.65%6.63%11.55%
66
Neutral
$462.73M-69.83%19.08%28.99%
60
Neutral
$2.79B-62.92%26.24%-94.81%
54
Neutral
$124.05M-6139.13%-56.74%96.59%
52
Neutral
$634.65M-4.06%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STEM
Stem Inc
14.23
5.39
60.97%
YEXT
Yext
9.06
2.84
45.66%
CCCS
CCC Intelligent Solutions Holdings
9.66
-0.74
-7.12%
CGNT
Cognyte Software
8.69
1.31
17.75%
PGY
Pagaya Technologies Ltd
37.18
24.90
202.77%
BLZE
Backblaze
8.69
2.94
51.13%

Stem Inc Corporate Events

Regulatory Filings and Compliance
Stem Inc Issues Press Release on Compliance
Neutral
Aug 7, 2025

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.

Executive/Board Changes
Stem Inc Announces New CFO Appointment
Neutral
Jul 2, 2025

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.

Private Placements and FinancingBusiness Operations and Strategy
Stem Inc’s Strategic Exchange Agreement on June 2025
Neutral
Jun 30, 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.

Stock Split
Stem Inc Approves 1-for-20 Reverse Stock Split
Neutral
Jun 16, 2025

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.

Executive/Board ChangesShareholder MeetingsStock Split
Stem Inc’s Key Proposals Approved at Annual Meeting
Positive
Jun 5, 2025

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.

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.Date of analysis: Aug 19, 2025