Analysts Are Optimistic We'll See A Profit From Stem, Inc. (NYSE:STEM)

We feel now is a pretty good time to analyse Stem, Inc.'s (NYSE:STEM) business as it appears the company may be on the cusp of a considerable accomplishment. Stem, Inc. provides artificial intelligence driven software and services that enable its customers to plan, deploy, and operate clean energy assets in the United States and internationally. With the latest financial year loss of US$854m and a trailing-twelve-month loss of US$22m, the US$127m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Stem's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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According to the 6 industry analysts covering Stem, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$151m in 2025. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of -33% is expected,

We're not going to go through company-specific developments for Stem given that this is a high-level summary, though, keep in mind that by and large periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.

See our latest analysis for Stem

One thing we would like to bring into light with Stem is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Stem to cover in one brief article, but the key fundamentals for the company can all be found in one place – Stem's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

1. Valuation: What is Stem worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Stem is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Stem’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.