SThree plc

LSE:STEM Stock Report

Market Cap: UK£348.4m

SThree Valuation

Is STEM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of STEM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: STEM (£2.63) is trading above our estimate of fair value (£2.36)

Significantly Below Fair Value: STEM is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for STEM?

Key metric: As STEM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for STEM. This is calculated by dividing STEM's market cap by their current earnings.
What is STEM's PE Ratio?
PE Ratio6.2x
EarningsUK£56.48m
Market CapUK£348.39m

Price to Earnings Ratio vs Peers

How does STEM's PE Ratio compare to its peers?

The above table shows the PE ratio for STEM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average27.5x
RWA Robert Walters
37.6x71.0%UK£214.2m
PAGE PageGroup
21.2x24.2%UK£1.1b
LTG Learning Technologies Group
16.4x-9.0%UK£776.1m
GATC Gattaca
34.9xn/aUK£26.8m
STEM SThree
6.2x-36.3%UK£349.7m

Price-To-Earnings vs Peers: STEM is good value based on its Price-To-Earnings Ratio (6.2x) compared to the peer average (27.5x).

Price to Earnings Ratio vs Industry

How does STEM's PE Ratio compare vs other companies in the GB Professional Services Industry?

2 CompaniesPrice / EarningsEstimated GrowthMarket Cap
IBPO iEnergizer
1.7xn/aUS$140.06m
TEK Tekcapital
1.5xn/aUS$21.38m
No more companies available in this PE range
STEM 6.2xIndustry Avg. 23.9xNo. of Companies4PE01632486480+
2 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: STEM is good value based on its Price-To-Earnings Ratio (6.2x) compared to the UK Professional Services industry average (23.9x).

Price to Earnings Ratio vs Fair Ratio

What is STEM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

STEM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio6.2x
Fair PE Ratio9.1x

Price-To-Earnings vs Fair Ratio: STEM is good value based on its Price-To-Earnings Ratio (6.2x) compared to the estimated Fair Price-To-Earnings Ratio (9.1x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst STEM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£2.63
UK£3.66
+39.1%
17.0%UK£4.50UK£2.75n/a6
Dec ’25UK£3.58
UK£4.94
+38.0%
10.8%UK£5.50UK£4.20n/a6
Nov ’25UK£3.62
UK£4.96
+36.9%
10.3%UK£5.50UK£4.20n/a6
Oct ’25UK£3.70
UK£4.98
+34.9%
9.6%UK£5.50UK£4.20n/a6
Sep ’25UK£4.12
UK£5.03
+22.2%
10.3%UK£5.55UK£4.20n/a6
Aug ’25UK£4.03
UK£5.03
+24.9%
10.3%UK£5.55UK£4.20n/a6
Jul ’25UK£4.06
UK£5.30
+30.7%
10.1%UK£6.00UK£4.30n/a6
Jun ’25UK£4.36
UK£5.58
+27.9%
13.0%UK£6.90UK£4.30n/a7
May ’25UK£4.30
UK£5.56
+29.4%
13.5%UK£6.90UK£4.20n/a7
Apr ’25UK£4.30
UK£5.56
+29.4%
13.5%UK£6.90UK£4.20n/a7
Mar ’25UK£4.19
UK£5.54
+32.1%
15.1%UK£6.90UK£3.90n/a7
Feb ’25UK£4.15
UK£5.54
+33.5%
16.3%UK£6.90UK£3.90n/a6
Jan ’25UK£4.18
UK£5.60
+34.0%
16.5%UK£6.90UK£3.90n/a6
Dec ’24UK£4.10
UK£5.59
+36.4%
18.4%UK£6.90UK£3.90UK£3.586
Nov ’24UK£3.53
UK£5.59
+58.4%
18.4%UK£6.90UK£3.90UK£3.626
Oct ’24UK£3.74
UK£5.77
+54.2%
18.5%UK£6.90UK£3.90UK£3.706
Sep ’24UK£3.54
UK£5.77
+63.1%
18.5%UK£6.90UK£3.90UK£4.126
Aug ’24UK£3.49
UK£5.77
+65.2%
18.5%UK£6.90UK£3.90UK£4.036
Jul ’24UK£3.42
UK£5.77
+68.9%
18.5%UK£6.90UK£3.90UK£4.066
Jun ’24UK£3.79
UK£6.23
+64.5%
16.0%UK£7.25UK£4.50UK£4.366
May ’24UK£4.22
UK£6.23
+47.9%
16.0%UK£7.25UK£4.50UK£4.306
Apr ’24UK£4.17
UK£5.99
+43.9%
18.3%UK£7.25UK£4.50UK£4.307
Mar ’24UK£4.65
UK£5.89
+26.7%
20.7%UK£7.25UK£3.90UK£4.197
Feb ’24UK£4.26
UK£5.89
+38.3%
20.7%UK£7.25UK£3.90UK£4.157
Jan ’24UK£4.03
UK£5.89
+46.2%
20.7%UK£7.25UK£3.90UK£4.187
Dec ’23UK£4.08
UK£5.79
+41.9%
24.1%UK£7.25UK£3.20UK£4.107

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/18 19:25
End of Day Share Price 2024/12/18 00:00
Earnings2024/05/31
Annual Earnings2023/11/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

SThree plc is covered by 26 analysts. 6 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
James BaylissBerenberg
James GilbertCanaccord Genuity
Andrew SmithCharles Stanley Securities