Stem (STEM) Free Cash Flow

: $-225.6 Mil (TTM As of Dec. 2023)

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Stem's total free cash flow for the months ended in Dec. 2023 was $-6.9 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Dec. 2023 was $-225.6 Mil.

Stem's Free Cash Flow per Share for the months ended in Dec. 2023 was $-0.04. Its free cash flow per share for the trailing twelve months (TTM) ended in Dec. 2023 was $-1.45.

During the past 3 years, the average Free Cash Flow per Share Growth Rate was -15.00% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 5 years, Stem's highest 3-Year average Free Cash Flow per Share Growth Rate was 19.50% per year. The lowest was -15.00% per year. And the median was 2.25% per year.

Stem Free Cash Flow Historical Data

The historical data trend for Stem's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Stem Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

Free Cash Flow

-76.04

-45.71

-111.44

-126.90

-225.61

Stem Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Free Cash Flow													-40.64	-41.18	-170.38	-7.12	-6.94

Stem Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Stem's Free Cash Flow for the fiscal year that ended in Dec. 2023 is calculated as

Free Cash Flow (A: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	-207.377	+	-18.236
	=	-225.6

Stem's Free Cash Flow for the quarter that ended in Dec. 2023 is calculated as

Free Cash Flow (Q: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	-2.129	+	-4.806
	=	-6.9

Free Cash Flow for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $-225.6 Mil.

Stem (NYSE:STEM) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Dec23, Stem's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Dec23)	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	0	/	3.88	+	0
	=	0.00 %

Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.

Stem Free Cash Flow Related Terms

Thank you for viewing the detailed overview of Stem's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.

Stem (STEM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Stem Inc (NYSE:STEM) » Definitions » Free Cash Flow

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Traded in Other Exchanges

5QQ0:Germany 5QQ0:Germany

Address

100 California Street, 14th Floor, San Francisco, CA, USA, 94111

Website

https://www.stem.com

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. Its solutions help customers maximize renewable energy generation and help build a cleaner and more resilient grid. In 2022, the company acquired AlsoEnergy, a provider of solar asset management software.

Executives

Rahul Shukla	officer: Chief Accounting Officer	100 CALIFORNIA STREET, SAN FRANCISCO CA 94111
Michael James Carlson	officer: Chief Operating Officer	100 CALIFORNIA STREET, SAN FRANCISCO CA 94111
David S Buzby	director
Alan Russo	officer: Chief Revenue Officer	100 ROLLINS ROAD, MILLBRAE CA 94030
Matthew Tappin	officer: President, Asset Management	100 CALIFORNIA STREET, 14TH FLOOR, SAN FRANCISCO CA 94111
Lisa L Troe	director	12181 BLUFF CREEK DRIVE, 4TH FLOOR, LOS ANGELES CA 90094
Saul R. Laureles	officer: Chief Legal Officer	5599 SAN FELIPE, 17TH FLOOR, HOUSTON TX 77056
John Eugene Carrington	director, officer: CEO and Director	350 WEST WASHINGTON STREET, SUITE 600, TEMPE AZ 85281
William John Bush	officer: Chief Financial Officer	539 BRYANT STREET, SUITE 403, SAN FRANCISCO CA 94107
Kim Homenock	officer: Chief People Officer	100 CALIFORNIA STREET, SAN FRANCISCO CA 94111
Robert Schaefer	officer: President, AlsoEnergy	100 CALIFORNIA STREET, SAN FRANCISCO CA 94111
Larsh Johnson	officer: Chief Technical Officer	100 ROLLINS RD, MILLBRAE CA 94030
Prakesh Patel	officer: Chief Strategy Officer	100 ROLLINS ROAD, MILLBRAE CA 94030
Adam Daley	director	C/O MAGNETAR CAPITAL LLC, 1603 ORRINGTON AVENUE, 13TH FLOOR, EVANSTON IL 60201
Anil Tammineedi	director	100 ROLLINS RD, MILLBRAE CA 94030