Why UBS Cut Stem’s Price Target Despite Improved Software Mix and EBITDA

On March 10, 2026, UBS lowered its terms people connected Stem to $12 from $18 but kept a Neutral rating, citing a slower bundle income outlook. The steadfast besides reduced its adjusted EBITDA estimates for 2026, 2027, and 2028 to $10 million, $22 million, and $41 million, respectively, from anterior forecasts of $17 million, $29 million, and $50 million. The revised people followed Stem’s fourth-quarter 2025 results, which the institution had released connected March 4.

Stem reported fourth-quarter 2025 gross of $47.2 million, down 15% twelvemonth implicit year, which the institution said was chiefly owed to sharply little artillery hardware income arsenic portion of its software-focused strategy. At the aforesaid time, software, services, and borderline hardware gross roseate 62% to $46.5 million. Fourth-quarter non-GAAP gross borderline improved to 45% from 36%, adjusted EBITDA roseate to $5.5 cardinal from $4.2 million, and nett nonaccomplishment narrowed to $16.0 cardinal from $51.1 million.

sabrisy/Shutterstock.com

For full-year 2025, gross accrued 8% to $156.3 million, portion software, services, and borderline hardware gross climbed 25% to $141.4 million. Stem besides posted full-year adjusted EBITDA of $6.7 million, compared with a nonaccomplishment of $22.8 cardinal successful 2024, and ended the 4th fourth with $48.9 cardinal successful currency and currency equivalents.

Stem, Inc. (NYSE:STEM) provides software, services, and vigor absorption exertion for cleanable vigor assets, helping customers monitor, optimize, and run storage, solar, and different distributed vigor systems crossed planetary markets.

While we admit the imaginable of STEM arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock. READ NEXT: 33 Stocks That Should Double successful 3 Years and 15 Stocks That Will Make You Rich successful 10 Years Disclosure: None. Follow Insider Monkey connected Google News.