Stem, Inc. (NYSE: STEM)

Sector: Utilities Industry: Utilities - Renewable CIK: 0001758766
Market Cap 92.98 Mn
P/B -0.39
P/E 0.91
P/S 0.56
ROIC (Qtr) -65.10
Div Yield % 0.00
Rev 1y % (Qtr) 30.54
Total Debt (Qtr) 366.92 Mn
Debt/Equity (Qtr) -1.56
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About

STEM, Inc., a Delaware corporation and a globally recognized entity, operates in the artificial intelligence (AI)-driven clean energy solutions and services sector. The company uses the stock symbol STEM and is renowned for its significant contributions to the energy industry. Its main business activities involve the provision of energy storage hardware, edge hardware, and an ongoing software platform, Athena, accompanied by professional services. These services aid in managing and operating the performance of standalone energy storage, integrated...

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Investment thesis

Bull case

  • Healthy cash reserves of 43.12M provide 3.04x coverage of short-term debt 14.18M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of (16.07M) provides strong 32.39x coverage of operating expenses (496000), showing operational efficiency.
  • Retained earnings of (1.47B) represent substantial 6.25x of equity (235.69M), indicating strong internal capital generation.
  • R&D investment of 39.02M represents healthy 0.30x of deferred revenue 128.92M, indicating strong future innovation pipeline.
  • Cash reserves of 43.12M provide solid 17.30x coverage of other non-current liabilities 2.49M, indicating strong liquidity.

Bear case

  • Investment activities of (8.35M) provide weak support for R&D spending of 39.02M, which is -0.21x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (16.07M) provides insufficient coverage of deferred revenue obligations of 128.92M, which is -0.12x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (16.07M) shows concerning coverage of stock compensation expenses of 4.68M, with a -3.43 ratio indicating potential earnings quality issues.
  • High receivables of 35.84M relative to inventory of 5.17M (6.94 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of (16.07M) provides minimal -42.28x coverage of tax expenses of 380000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Renewable
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CEG Constellation Energy Corp 98.92 Bn 153.61 4.71 9.04 Bn
2 ENLT Enlight Renewable Energy Ltd. 9.32 Bn 66.03 14.79 5.54 Bn
3 BEP Brookfield Renewable Partners L.P. 9.20 Bn -37.24 1.46 39.66 Bn
4 ORA Ormat Technologies, Inc. 5.64 Bn 146.14 14.39 2.75 Bn
5 CWEN Clearway Energy, Inc. 4.62 Bn 184.82 3.85 9.22 Bn
6 FLNC Fluence Energy, Inc. 2.37 Bn -45.59 0.93 0.39 Bn
7 RNW ReNew Energy Global plc 1.93 Bn 14.53 1.21 9.22 Bn
8 XIFR XPLR Infrastructure, LP 1.00 Bn -35.67 0.84 6.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.16 0.82
EV to Cash from Ops. EV/CFO -26.27 3.77
EV to Debt EV to Debt 1.15 -7.57
EV to EBIT EV/EBIT 3.43 18.11
EV to EBITDA EV/EBITDA -9.12 5.59
EV to Free Cash Flow [EV/FCF] EV/FCF -17.29 -9.43
EV to Market Cap EV to Market Cap 4.54 -1.15
EV to Revenue EV/Rev 2.56 -22.88
Price to Book Value [P/B] P/B -0.39 2.64
Price to Earnings [P/E] P/E 0.91 1.37
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -4.71
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -0.74
Dividend per Basic Share Div per Share (Qtr) 0.00 0.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 12.62
Interest Coverage Int. cover (Qtr) 6.13 -4.73
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 39.97 -691.81
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -42.78 37.74
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.15
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 114.92 -300.29
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 94.04 -47.88
EBIT Growth (1y) % EBIT 1y % (Qtr) 114.98 -76.46
EBT Growth (1y) % EBT 1y % (Qtr) 112.26 -85.90
EPS Growth (1y) % EPS 1y % (Qtr) 111.98 398.06
FCF Growth (1y) % FCF 1y % (Qtr) 35.71 1,637.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1,295.39 93.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.45 0.35
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.38 1.83
Current Ratio Curr Ratio (Qtr) 0.83 2.29
Debt to Equity Ratio Debt/Equity (Qtr) -1.56 0.89
Interest Cover Ratio Int Coverage (Qtr) 6.13 -4.73
Times Interest Earned Times Interest Earned (Qtr) 6.13 -4.73
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 103.50 -241.05
EBIT Margin % EBIT Margin % (Qtr) 74.60 -107.41
EBT Margin % EBT Margin % (Qtr) 62.43 -407.45
Gross Margin % Gross Margin % (Qtr) 20.90 9.67
Net Profit Margin % Net Margin % (Qtr) 62.20 -408.25