Investment Thesis
STEM is technically insolvent with negative stockholders equity of -$266.3M and liabilities exceeding assets. The company is burning cash from operations (-$8.3M quarterly) with only ~4-5 quarters of runway at current rates, while operating margins of -49% and net margins of -65% indicate the business model cannot support current expense structure despite modest revenue growth.
Strengths
- Revenue growing 8.1% YoY shows market demand for services
- Gross margin of 37.4% indicates reasonable pricing power and product-market fit at gross level
- Maintains $36.6M in cash providing short-term operational flexibility
Risks
- Negative stockholders equity of -$266.3M indicates technical insolvency and existential solvency risk
- Current ratio of 0.84x and operating cash burn of -$8.3M create acute liquidity crisis with estimated 4-5 quarter cash runway
- Operating margin of -49% and net margin of -65% demonstrate business model failure to control operating expenses despite revenue scale
- Negative interest coverage of -3.0x indicates inability to service debt from operations, requiring asset sales or restructuring
Key Metrics to Watch
- Quarterly operating cash flow and cash runway depletion rate
- Path to operating profitability or signs of restructuring/bankruptcy filing
- Changes in stockholders equity and debt restructuring activities
Financial Metrics
Revenue
29.0M
Net Income
-18.9M
EPS (Diluted)
$-2.22
Free Cash Flow
-8.3M
Total Assets
281.9M
Cash
36.6M
Profitability Ratios
Gross Margin
37.4%
Operating Margin
-49.0%
Net Margin
-65.3%
ROE
N/A
ROA
-6.7%
FCF Margin
-28.7%
Balance Sheet & Liquidity
Current Ratio
0.84x
Quick Ratio
0.84x
Debt/Equity
N/A
Debt/Assets
194.3%
Interest Coverage
-3.02x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T12:31:58.773402 |
Data as of: 2026-03-31 |
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