STEM Should I Buy
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Stem Inc (STEM) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some positive developments, such as achieving its first positive adjusted EBITDA and expanding internationally, the financial performance remains weak, with significant YoY declines in revenue, net income, and EPS. Additionally, the technical indicators suggest a bearish trend, and there are no strong proprietary trading signals or notable catalysts to justify an immediate buy.
The MACD is positive and expanding, indicating some bullish momentum. However, the RSI is neutral at 69.38, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its resistance level (R1: 13.018), suggesting limited upside in the short term. Overall, the technical outlook is mixed but leans bearish.
Achieved first positive adjusted EBITDA of $7 million in
Expanded into international markets.
Q4 2025 revenue grew 62% YoY to $47.2 million.
Significant YoY declines in net income (-68.75%) and EPS (-69.90%).
Gross margin dropped sharply (-1473.70% YoY).
Analysts lowered the price target from $23 to $12, citing limited visibility into sustained earnings growth.
Bearish moving averages and a high probability of short-term price declines.
In Q4 2025, revenue dropped to $47.14 million (-15.55% YoY), net income dropped to -$15.98 million (-68.75% YoY), and EPS dropped to -$1.89 (-69.90% YoY). Despite these declines, the company achieved its first positive adjusted EBITDA of $7 million for the full year and reported full-year revenue of $156 million.
Roth Capital lowered the price target to $12 from $23 and maintained a Neutral rating. Analysts appreciate the company's cost discipline and potential in services and software margins but remain cautious due to limited visibility into sustained earnings growth.
