Stem (NYSE:STEM) Downgraded by Wall Street Zen to Sell

Key Points

• Wall Street Zen downgraded Stem from "hold" to "sell" and Weiss Ratings cut it to "sell (d+)", leaving the consensus at a "Reduce" rating with an average price target of $20.00.
• Despite downgrades, Stem reported a Q4 revenue and EPS beat, record gross margins and its first-ever positive adjusted EBITDA, and management is pivoting toward higher‑margin software/SaaS offerings with FY‑2026 guidance of $140M–$190M.
• Shares trade around $12 (market cap ≈ $102M; 12‑month range $5.81–$32.23) while analysts still expect negative EPS (~‑0.52) for the current fiscal year, underscoring execution and transition risk.

Stem (NYSE:STEM - Get Free Report) was downgraded by analysts at Wall Street Zen from a "hold" rating to a "sell" rating in a research note issued to investors on Saturday.

Separately, Weiss Ratings cut Stem from a "hold (c-)" rating to a "sell (d+)" rating in a report on Wednesday, February 11th. Three investment analysts have rated the stock with a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat, Stem presently has an average rating of "Reduce" and an average price target of $20.00.

Stem Stock Down 0.5%

Shares of STEM opened at $12.12 on Friday. The business's 50-day moving average price is $14.79 and its 200-day moving average price is $17.07. Stem has a twelve month low of $5.81 and a twelve month high of $32.23. The stock has a market cap of $101.69 million, a PE ratio of -1.28 and a beta of 1.30.

Stem (NYSE:STEM - Get Free Report) last issued its quarterly earnings data on Wednesday, March 4th. The company reported ($1.85) EPS for the quarter, beating the consensus estimate of ($1.96) by $0.11. The firm had revenue of $47.14 million for the quarter, compared to analysts' expectations of $39.05 million. Analysts expect that Stem will post -0.52 earnings per share for the current fiscal year.

Hedge Funds Weigh In On Stem

Several institutional investors and hedge funds have recently made changes to their positions in the business. Balyasny Asset Management L.P. bought a new stake in Stem in the fourth quarter worth $177,000. Bridgeway Capital Management LLC grew its stake in shares of Stem by 346.2% during the fourth quarter. Bridgeway Capital Management LLC now owns 69,600 shares of the company's stock valued at $1,047,000 after buying an additional 54,000 shares during the last quarter. Trexquant Investment LP bought a new position in shares of Stem during the fourth quarter valued at about $385,000. Jump Financial LLC purchased a new position in shares of Stem in the fourth quarter worth about $534,000. Finally, Mangrove Partners IM LLC bought a new stake in shares of Stem in the 4th quarter valued at about $272,000. Institutional investors own 61.63% of the company's stock.

Stem News Roundup

Here are the key news stories impacting Stem this week:

• Positive Sentiment: Q4 & full‑year 2025 results showed a revenue beat and margin improvement; Stem reported record gross margins and its first-ever positive adjusted EBITDA, signaling improving unit economics and operational leverage. Stem Announces Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: Company commentary and analyst pieces highlight a strategic shift toward higher‑margin software & services (a SaaS-style recurring revenue model), which could support valuation expansion if execution and churn metrics remain strong. Stem Inc.: Deciphering the SaaS Pivot and Strategic Realignment
• Positive Sentiment: Earnings-call coverage emphasizes a “profitability pivot” with improving cash flows and margin trends — investors looking for durable margin expansion may view this as the key takeaway. Stem, Inc. Earnings Call Marks Profitability Pivot
• Neutral Sentiment: FY‑2026 revenue guidance was updated to a wide $140M–$190M range (consensus ≈ $167M). The range leaves room for upside but also creates near‑term uncertainty about the pace of the SaaS transition and growth cadence. Earnings report & slides
• Neutral Sentiment: Q4 EPS remained a loss (narrower than estimates) and analysts still expect negative EPS for the current fiscal year (-0.52 consensus), so the company is in a transition phase from cash-burning hardware to recurring software revenue. MarketBeat STEM overview
• Neutral Sentiment: Full Q4 earnings-call transcript is available for detail on margin drivers, backlog, and the cadence of software bookings — active investors should review management’s answers on retention, ARR conversion and capex. Q4 2025 Earnings Call Transcript
• Negative Sentiment: Insider selling was reported (small sales by executives/shareholders disclosed in Form 4 filings), which can be interpreted negatively by some investors even if amounts are modest. SEC Form 4 - Insider Sales

About Stem

Stem, Inc is a technology company specializing in AI-driven energy storage and optimization solutions for commercial, industrial and utility customers. The company delivers integrated hardware and software systems that enable clients to manage energy consumption, reduce peak demand charges and provide ancillary services to the power grid. By combining battery storage hardware with advanced machine-learning algorithms, Stem helps organizations align energy usage with cost-saving opportunities while supporting grid reliability and renewable integration.

At the core of Stem's offering is its Athena software platform, which uses real-time data and predictive analytics to forecast energy needs and automatically dispatch stored energy when it is most valuable.

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