Stem

STEM

Software - Infrastructure · Technology

Price

$6.26

-0.06 (-0.95%)

Market Cap

$56.1M

Winston Score

Winston is worried

Weak fundamentals across most pillars.

Share count rising — dilution

+60.9% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 5.3M (2021) → 8.5M (2025)

Stem, Inc. helps businesses store and manage electricity using large batteries and smart software. Its main product is an AI-powered software platform called Athena, which controls battery storage systems for solar farms, commercial buildings, and energy developers. The company operates in the clean energy industry, connecting hardware from battery manufacturers with its own software to help customers save money on electricity and sell power back to the grid.

Stem makes money by selling long-term software contracts tied to battery storage projects, plus some revenue from helping customers buy and install the hardware itself. It operates mainly in the United States but has some international projects. With a market cap of around $100 million and an operating loss of roughly 33 cents on every dollar of revenue, the company is not yet profitable. The biggest risk Stem faces is that its hardware-linked business model has thin margins, and slowing growth in utility-scale solar and storage projects could make it harder to reach profitability.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-10.8% YoY

YoY Growth Rate

Revenue declining

EPS Growth

+27.2% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$35M/ year

↓ Declining (-31% vs prior year)

22.6% of revenue

1.5x the sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

3.0%ownership

Relatively low insider ownership

Cash Runway

~13 months

$37M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Adequate runway but may need to raise capital within 2 years

Revenue declining

Stem's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

37.4%

Modest — 37.4% gross margin

Operating Margin

-37.6%

Losing money on operations — -37.6%

ROCE

-17.2%

Weak — -17.2% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

+0.7%

Nearly flat sales (0.7% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

-7%

Weak — only -7% of profit becomes cash

FCF Margin

-10.1%

Burning cash (-10.1%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

Debt / Equity

N/A

—

Data not available

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

0.4x

Attractive valuation — P/E 0.4

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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