Disclaimer: This content is for informational and educational purposes only and should not be construed as financial or investment advice. Always do your own research and consult a licensed financial advisor before making investment decisions.

Disclosure: The author holds a long position in STEM.

← Back to Free Index

STEM

Analysis as of: 2026-01-06

Stem, Inc.

Provides PowerTrack software and managed services that monitor, control, and optimize solar and battery energy storage assets for asset owners, operators, and utilities.

ai energy enterprise software

On Yahoo Finance ...

Jump to: Summary • Analysis • Opportunity • Risk • Trends • Third Party Analyst Consensus

Summary

Control-plane turnaround with leverage constraints

A credible software-and-services pivot is reducing volatility and improving gross margin quality. Upside depends on turning telemetry + workflows into repeatable controls deployments while keeping leverage from dominating equity outcomes.

Analysis

Thesis

If Stem sustains its pivot to recurring software + managed services and becomes the control/workflow “system of record” for hybrid solar+storage portfolios, the business can compound mainly via de-risking (fewer surprises, steadier renewals) and selective new SKUs (controls + compliance), supporting a durable EV step-up even without returning to hardware-led growth.

Last Economy Alignment

Stem benefits from the Last Economy’s “information→reliability” shift: energy operations get automated, and the valuable layer is trusted control + verified telemetry. It’s not a compute owner, but it can be a high-leverage workflow and prediction layer as electrification and AI-driven load growth stress grids.

Upgrade to Allocator to also access: Thesis Critique

Opportunity Outlook

Average Implied 5-Year Multiple

1.6x (from 5 most recent analyses)

Reasoning

The upside is a “quality upgrade” story: more recurring software and services, tighter delivery, and fewer one-off contract issues. If Stem can keep growing contracted subscriptions while packaging repeatable controls deployments, it earns a higher-confidence role in operating fleets—yet leverage and competitive intensity keep the terminal multiple below best-in-class energy software peers.

Upgrade to Allocator to also access: Simplified Opportunity Explanation

Risk Assessment

Overall Risk Summary

The main risk is balance-sheet gravity: secured debt cost and maturity dynamics can force dilution or constrain product investment. Next is competitive compression (OEM/integrator bundles) before Stem proves repeatable, measurable savings and low-liability controls delivery. Finally, the buyer is conservative: one high-profile reliability/security incident or failed guarantee can trigger churn and slow adoption.

Upgrade to Allocator to also access: Tech Maturity Risk Score, Adoption Timing Risk Score, Moat Strength Risk Score, Capital Needs Risk Score, Regulatory Risk Score, Execution Risk Score, Concentration Risk Score, Unit Economics Risk Score, Valuation Risk Score, Macro Sensitivity Risk Score

Trends

Key Changes

Finance leadership change: new Chief Accounting Officer effective January 5, 2026 (succession from prior CAO).
No new earnings guidance since 3Q25; market focus remains on ARR stability and cash discipline.
Macro tailwind remains visible: data-center-driven load growth continues to pressure grid reliability and flexibility demand.

Upgrade to Builder to also access: Future Considerations

Third Party Analyst Consensus

12-Month Price Target

$19.55

Upgrade to Reader to also access: Bull Case, Base Case, Bear Case