Stem (NYSE:STEM) Posts Quarterly Earnings Results, Beats Expectations By $0.17 EPS

Stem (NYSE:STEM) released its earnings results on Wednesday. The company reported ($1.58) earnings per share (EPS) for the quarter, topping the consensus estimate of ($1.75) by $0.17, Zacks reports. The business had revenue of $33.65 million for the quarter, compared to analysts’ expectations of $36.65 million.

Here are the key takeaways from Stem’s conference call:

• Profitability and cash flow improved significantly: Q2 adjusted EBITDA rose 63% year over year to $6 million, marking the fifth consecutive positive quarter, while operating cash flow reached breakeven at $0.3 million.
• The software-centric mix continued to strengthen results, with record non-GAAP gross margin of 55%, PowerTrack software revenue up 11% year over year, and edge hardware revenue up 22%.
• Commercial momentum accelerated, as bookings increased 39% sequentially to $37 million, backlog rose 18% to $27 million, and PowerTrack ARR grew 3% sequentially to $42.8 million.
• PowerTrack EMS expanded internationally through projects in Chile and Hungary and now has bookings across six countries and three continents, supporting management’s focus on utility-scale growth in 2027 and beyond.
• Total Q2 revenue declined 12% year over year to $34 million because battery hardware resale revenue fell to $0.3 million from $5 million; management expects more low-margin battery resale revenue in the second half, which should reduce gross-margin percentages.

Stem Price Performance

NYSE:STEM opened at $5.45 on Thursday. Stem has a 1 year low of $4.92 and a 1 year high of $32.23. The stock’s 50 day simple moving average is $6.82 and its two-hundred day simple moving average is $9.46. The company has a market cap of $48.83 million, a price-to-earnings ratio of -0.63 and a beta of 1.50.

Analyst Ratings Changes

STEM has been the subject of several recent analyst reports. Barclays dropped their price target on Stem from $18.00 to $8.00 and set an “equal weight” rating for the company in a research note on Monday, July 27th. Weiss Ratings reiterated a “sell (d+)” rating on shares of Stem in a research report on Friday, July 24th. UBS Group reissued a “neutral” rating and issued a $10.50 target price (down from $12.00) on shares of Stem in a report on Monday, May 11th. Wall Street Zen lowered shares of Stem from a “sell” rating to a “strong sell” rating in a research report on Saturday, May 9th. Finally, Susquehanna cut their target price on shares of Stem from $10.00 to $7.50 and set a “neutral” rating for the company in a research note on Friday, July 10th. Four investment analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the stock currently has a consensus rating of “Reduce” and a consensus target price of $9.00.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently modified their holdings of the business. IFP Advisors Inc lifted its position in Stem by 258.1% during the third quarter. IFP Advisors Inc now owns 1,479 shares of the company’s stock valued at $26,000 after purchasing an additional 1,066 shares during the last quarter. Virtu Financial LLC increased its holdings in shares of Stem by 11.0% in the 3rd quarter. Virtu Financial LLC now owns 12,856 shares of the company’s stock worth $225,000 after buying an additional 1,279 shares during the last quarter. Geode Capital Management LLC raised its position in shares of Stem by 2.1% during the 4th quarter. Geode Capital Management LLC now owns 88,246 shares of the company’s stock valued at $1,329,000 after buying an additional 1,821 shares in the last quarter. Wells Fargo & Company MN raised its position in shares of Stem by 89.2% during the 4th quarter. Wells Fargo & Company MN now owns 11,646 shares of the company’s stock valued at $175,000 after buying an additional 5,492 shares in the last quarter. Finally, Vanguard Group Inc. raised its position in shares of Stem by 2.2% during the 3rd quarter. Vanguard Group Inc. now owns 395,223 shares of the company’s stock valued at $6,924,000 after buying an additional 8,468 shares in the last quarter. 61.63% of the stock is owned by hedge funds and other institutional investors.

Stem News Roundup

Here are the key news stories impacting Stem this week:

• Positive Sentiment: Stem reported a second-quarter loss of $1.58 per share, narrower than the $1.76 consensus estimate and substantially improved from a $3.73 loss in the year-ago quarter. The earnings beat may provide some support for the stock. Stem, Inc. Reports Q2 Loss, Beats Revenue Estimates
• Positive Sentiment: The company issued fiscal 2026 revenue guidance of $140 million to $190 million. Although the range is wide, its $165 million midpoint is above the current analyst consensus of $157 million, suggesting potential for stronger-than-expected full-year sales if Stem reaches the upper half of the outlook. Stem Updates Fiscal 2026 Guidance
• Neutral Sentiment: Stem’s quarterly revenue was $33.65 million, below analysts’ $36.65 million forecast. The revenue shortfall contrasts with the earnings beat and indicates that cost reductions or other factors, rather than stronger sales, helped the company outperform on EPS. Stem Quarterly Earnings Results
• Negative Sentiment: Stem remains deeply unprofitable, with analysts expecting a full-year loss of approximately $7.76 per share. The stock is trading below its 50-day and 200-day moving averages and near its 12-month low, reflecting continued investor concerns about profitability, execution and demand. Stem Stock Performance

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.