Stem, Inc. (NYSE: STEM) is an energy storage system provider. To provide customers with a comprehensive solution, the company bundles third-party hardware with its own Athena software. STEM sells its products to industrial, independent power providers and renewable energy developers.
Why should Investors make an Exit?
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
STEM's share price has fallen 55.61% in the past six months and is currently leaning towards the lower end of its 52-week range of USD 9.11 to USD 37.79. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 9.00.
As the company is operating at a substantially low margin, increase in operational losses, current valuation, and bearish technical indicators, we recommend a "Sell" rating on the stock at the closing price of USD 11.24, as of February 24, 2022. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing.
Three-Year Technical Price Chart (as of February 24, 2022). Source: REFINITIV; Analysis by Kalkine Group
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.