System1 (SYS1) AI Stock Analysis

• Market Cap: £57.74M
• Dividend Yield: 1.12%
• Average Volume (3M): 17.17K
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.45
• Revenue Growth: 33.67%
• EPS Growth: 154.85%
• Country: UK
• Employees: 160
• Sector: Communication Services
• Sector Strength: 82
• Industry: Advertising Agencies
• EPS (TTM): 0.25
• Shares Outstanding: 12,689,073
• 10 Day Avg. Volume: 37,511
• 30 Day Avg. Volume: 17,167
• PEG Ratio: 0.12
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.14
• Price to Cash Flow (P/CF): 98.30
• P/FCF Ratio: 488.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £865.00
• Price Target Upside: 90.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

System1 demonstrates strong financial performance with robust income growth and effective cash flow management. However, negative technical indicators point to short-term market challenges. The valuation suggests caution with a relatively high P/E ratio. Despite these factors, the company's strategic growth and market expansion provide a balanced outlook.

System1 Business Overview & Revenue Model

Company Description

System1 (SYS1) is a leading company in the digital marketing and consumer acquisition sector. The company specializes in leveraging advanced data science and machine learning technologies to identify and target high-intent consumers across various digital channels. System1 operates a proprietary platform that optimizes the acquisition of these consumers for its clients, making it a key player in the digital advertising and marketing industry.

How the Company Makes Money

System1 generates revenue primarily through its performance marketing platform that connects advertisers with consumers who are actively searching for products and services. The company's revenue model is based on a cost-per-action (CPA) basis, where advertisers pay System1 when a specified action is completed, such as a click, lead, or sale. Key revenue streams include partnerships with search engines, social media platforms, and websites where it displays targeted advertisements. System1 also benefits from its proprietary technology, which enhances the efficiency and effectiveness of its marketing campaigns, contributing significantly to its earnings.

System1 Financial Statement Overview

Summary

System1 exhibits strong financial health with upward trends in revenue, profitability, and cash flows. The company effectively manages its leverage and capital structure, ensuring stability and growth. Continued focus on maintaining efficient operations and prudent financial management will be key to sustaining this positive trajectory.

Income Statement

The income statement shows a strong improvement in revenue and profit margins. The company achieved a Gross Profit Margin of 87.0% and a Net Profit Margin of 6.8% in the last annual period, indicating efficient cost management. Revenue growth of 28.2% year-over-year reflects a robust upward trend. EBIT Margin improved to 10.3%, and EBITDA Margin reached 14.7%, demonstrating increased operational efficiency. However, the company must remain cautious of market fluctuations impacting future revenue.

Balance Sheet

The balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 0.03, indicating low leverage and reduced financial risk. Return on Equity is solid at 19.2%, showcasing effective use of equity capital to generate profits. The Equity Ratio of 55.3% suggests a healthy capital structure. Nonetheless, maintaining equity growth while managing liabilities remains crucial for long-term stability.

Cash Flow

Cash flow analysis reveals significant improvements, with a Free Cash Flow Growth Rate of 370.7% year-over-year, highlighting strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio of 2.9 indicates effective cash management. The Free Cash Flow to Net Income Ratio of 2.5 further emphasizes strong liquidity and reinvestment potential. However, the company should focus on sustaining positive free cash flow over time.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
30.02M	23.41M	24.10M	22.84M	25.48M
	Gross Profit
26.12M	19.72M	20.20M	19.11M	21.26M
	EBIT
3.10M	855.00K	151.00K	3.19M	918.00K
	EBITDA
4.40M	2.04M	1.10M	4.30M	2.60M
	Net Income Common Stockholders
2.03M	404.00K	955.00K	1.69M	-231.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.61M	5.72M	11.17M	9.01M	6.65M
	Total Assets
19.09M	14.98M	18.59M	17.41M	17.30M
	Total Debt
346.00K	1.46M	5.01M	5.08M	6.77M
	Net Debt
-9.22M	-4.26M	-6.17M	-3.93M	124.00K
	Total Liabilities
8.52M	6.37M	10.33M	10.17M	11.54M
	Stockholders Equity
10.57M	8.61M	8.26M	7.23M	5.76M
Cash Flow		Free Cash Flow
5.10M	-1.88M	3.90M	3.71M	1.68M
	Operating Cash Flow
5.93M	-628.00K	4.04M	3.91M	2.60M
	Investing Cash Flow
-833.00K	-1.25M	-138.00K	-198.00K	-916.00K
	Financing Cash Flow
-1.12M	-3.82M	-1.95M	-1.09M	648.00K

System1 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 455.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SYS1, the sentiment is Negative. The current price of 455 is below the 20-day moving average (MA) of 573.50, below the 50-day MA of 588.15, and below the 200-day MA of 646.53, indicating a bearish trend. The MACD of -15.62 indicates Positive momentum. The RSI at 14.55 is Positive, neither overbought nor oversold. The STOCH value of 29.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SYS1.

System1 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRE	73 Outperform	£589.08M	5.70	12.25%	7.82%	27.08%	-34.38%
RCH	67 Neutral	£244.59M	4.51	8.15%	9.57%	-5.28%	148.54%
SAA	66 Neutral	£196.83M	13.32	33.73%	0.99%	-12.89%	―
YOU	65 Neutral	£323.56M	244.69	0.70%	3.26%	42.19%	-94.16%
SYS1	64 Neutral	£57.74M	17.84	29.58%	1.12%	33.67%	154.85%
Sector *	59 Neutral	$13.73B	6.72	-2.47%	3.83%	2.30%	-35.22%

System1 Corporate Events

System1 Group PLC Announces Change in Major Shareholder Holdings

System1 Group PLC has announced a change in its major holdings, with Octopus Investments Limited increasing its voting rights to 5.04% from a previous 4.33%. This acquisition of voting rights highlights a significant shift in shareholder dynamics, potentially impacting the company’s strategic decisions and market positioning.

Spark’s Take on GB:SYS1 Stock

According to Spark, TipRanks’ AI Analyst, GB:SYS1 is a Neutral.

System1 demonstrates strong financial performance with robust income growth and effective cash flow management. However, negative technical indicators point to short-term market challenges. The valuation suggests caution with a relatively high P/E ratio. Despite these factors, the company’s strategic growth and market expansion provide a balanced outlook.

To see Spark’s full report on GB:SYS1 stock, click here.

System1 Group PLC Achieves 25% Revenue Growth Amid Market Challenges

System1 Group PLC reported a 25% increase in total revenue for the fiscal year ending March 31, 2025, driven by a 39% rise in platform revenue. The company successfully onboarded over 300 new platform clients, contributing to a 23% increase in platform revenue, and saw significant growth in the US and UK markets. Despite global market volatility, System1 maintained a strong gross profit margin of 88% and improved its adjusted profit before taxation by 68% year-on-year. The company plans to continue its growth momentum, particularly in the US market, while acknowledging potential challenges due to economic uncertainties.

Spark’s Take on GB:SYS1 Stock

According to Spark, TipRanks’ AI Analyst, GB:SYS1 is a Neutral.

System1 demonstrates strong financial performance with robust income growth and effective cash flow management, contributing significantly to the overall score. However, technical indicators show negative market momentum, which poses a risk to short-term stock performance. The valuation is fair but suggests caution due to the relatively high P/E ratio. These contrasting factors combine to form a moderate overall stock score.

To see Spark’s full report on GB:SYS1 stock, click here.