BMO Capital analyst Ameet Thakkar has maintained their neutral stance on STEM stock, giving a Hold rating today.
Ameet Thakkar’s rating is based on several factors that contribute to a cautious outlook for Stem Inc. The company has recently undergone a strategic review and leadership change, which, while promising, requires time to manifest in improved performance. The guidance for fiscal year 2025 appears underwhelming, with projected revenues between $125-175 million and an adjusted EBITDA ranging from -$10 million to $5 million, raising concerns about the company’s ability to manage without errors given the year-end cash balance of $52 million.
Additionally, the guidance for software and service revenue suggests limited growth, as the company continues to rely on its PowerTrack solar software application, indicating that its software offerings are still developing. The anticipated revenue base of $150 million and cash operating expenses of $50-60 million do not suggest a significant EBITDA improvement. Furthermore, the competition from OEMs and the need to establish the viability of its service and software offerings in a competitive market add to the cautious stance. Consequently, Thakkar has lowered the target price and maintains a Hold rating, reflecting these uncertainties.
According to TipRanks, Thakkar is an analyst with an average return of -7.7% and a 40.79% success rate. Thakkar covers the Technology sector, focusing on stocks such as Enphase Energy, First Solar, and SolarEdge Technologies.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $0.50 price target.