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Stem’s STEM shares have jumped 32.1% over the past month, outperforming the broader Zacks Computer and Technology sector’s appreciation of 19.5% and the Zacks Computers - IT Services industry’s rise of 17.8%.
STEM's strong stock price performance can be largely attributed to its robust first-quarter 2025 results, as the company reached several key profitability milestones.
Stem delivered a strong top-line performance in the first quarter of 2025, with total revenues rising 27% year over year, driven by heightened focus on its software portfolio, particularly the PowerTrack platform. The top line beat the Zacks Consensus Estimates by 26%, highlighting the success of STEM’s strategy to shift toward a more software-centric business model. Stem incurred a loss of 15 cents per share, narrower than the Zacks Consensus Estimate of a loss of 20 cents.
The company reported a 46% enhancement in the gross margins, driven by strong growth across its high-margin software, services and edge device offerings. STEM also generated positive quarterly cash flow of $8.5 million from operations for the first time in its history — a key indicator of the company’s operational discipline and progress. These achievements underscore the effectiveness of STEM’s refined business model and its strategic execution.
Stem, Inc. Price and Consensus
Stem, Inc. price-consensus-chart | Stem, Inc. Quote
STEM shares have outperformed its industry peers, including Cerence CRNC, Accenture ACN and Roper Technologies ROP. Shares of Cerence, Accenture and Roper Technologies have gained 39.2%, 13.8%, and 4.9%, respectively, over the same time frame.
Stem’s Impressive Financial Performance
A key highlight of the first-quarter 2025 results was the continued expansion in STEM’s recurring revenue streams. Annual recurring revenue (ARR) reached $57 million, up 8% year over year, whereas contracted annual recurring revenue (CARR) grew 7% sequentially to $69 million. These metrics underscore the strength and scalability of STEM’s software and services portfolio, which is increasingly contributing to long-term revenue visibility and improved profitability.
Operational metrics showed meaningful improvement. Solar operating AUM reached 32.4 GW, representing a 20% year-over-year increase and an 8% sequential gain. Storage Operating AUM doubled to 1.6 GWh from the same period last year.
However, bookings in the reported quarter came in at $34.5 million, slightly below the $37.6 million reported in the year-ago quarter. STEM’s contracted backlog rose 21% sequentially to $25.3 million, reflecting solid underlying demand and a healthy project pipeline moving forward.