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Is Stem (STEM) Setting Up for a Breakdown?

Christian Tharp November 19, 2021
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Stem Inc. (STEM) is a provider of energy storage systems. The company bundles third-party hardware with its proprietary Athena software to provide customers a turnkey solution. Stem sells its solutions to commercial and industrial customers as well as independent power producers and renewable developers…

Stem Inc. (STEM) recently reported record revenue in its third quarter results. Sales rose 334% year over year due to a rise in its backlog that grew 25% from the previous quarter. There is an especially high demand for its smart energy solutions, which are enabled by its Athena platform.

The company looks solid based on fundamentals as its current ratio is 8.3 and its debt to equity is 0. Analysts expect sales to jump 114.7% and earnings to rise 82.9% next year. However, the stock appears overvalued with an EV/EBITDA of 73.8. STEM’s performance has been mixed since August. This is evident in the chart below.

Take a look at the 1-year chart of STEM below with added notations…

See chart and continue reading at STOCKNEWS.com

Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group.

My Chartered Market Technician (CMT) designation substantiates me as an expert in areas such as the technical analysis of stock trends, market indicators, cycles, price patterns, Elliot Wave principles, Candlestick charting, analyzing financial trends and behaviors, portfolio strategies, and forecasting future price movements. With my straightforward approach to simple, systematic trading, students learn how to strategically assess buy signals and market entry timing, establishment and management of stop losses, and how to employ a simple and disciplined trading approach that creates profits.

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