Stem, Inc. just reported Q1 results into one of the most charged short-positioning setups it has seen all year.
Q1 delivered a classic beat-miss split. EPS came in at -$2.22, better than the -$2.30 consensus. Revenue landed at $29 million, short of the $33.8 million estimate. The company held its full-year 2026 sales guidance at $140–$190 million, bracketing analyst expectations of roughly $165 million. Add a bolt-on acquisition — Raicoon, folded in to expand the PowerTrack platform — and the headline package is mixed rather than clean.
The short positioning adds meaningful context. Short interest is running at 12.5% of the free float, a level high enough to matter. The position has been grinding roughly flat for the past month, down just 0.2%, after a brief spike toward 1.1 million shares in early April unwound into the earnings date. What has changed is the borrowing cost. Cost to borrow has fallen sharply, down 18% over the week and 21% over the month, and now sits near 1.36% — well below the ~2.3% peaks recorded in late March. Availability at roughly 198% of short interest means the lending market is relaxed: there are nearly twice as many shares available to borrow as are currently borrowed. An ORTEX short score of 71 keeps STEM in elevated territory, but the score has been range-bound between 70 and 71 for the past two weeks, offering no directional read.
Options traders have rotated away from defensive positioning ahead of results. The put/call ratio is at 0.55, more than a standard deviation below its 20-day average of 0.60, marking one of the more call-heavy readings of recent months. That shift began in late April, when the ratio was tracking closer to 0.62. The move suggests investors were adding upside exposure into the print rather than buying protection — a posture that, given the revenue miss, will now face a retest.
The Street remains cautious rather than hostile. The mean price target is $13.50, roughly 27% above the current $10.58 close. The most recent move of note came from Susquehanna in early April, which maintained its Neutral rating while slashing its target from $21 to $10 — a cut that brought the firm's target in line with where the stock actually trades. UBS similarly lowered to $12 in March while staying Neutral. Both moves reflect a pattern of analysts trimming ambition without abandoning coverage. The bull case centres on ARR growth toward $55–65 million and an eventual shift to software-heavy revenues via the Athena platform. The bear case is the nearer-term reality: negative GAAP gross margins, reduced EBITDA estimates, and revenue growth that consistently falls short of targets.
Earnings history reinforces the two-sided nature. The March print triggered a 28% single-day rally. The most recent event, on May 1, produced a 5.3% decline. The stock is up 22% over the past month, meaning a significant portion of recent buyers entered expecting a cleaner number than they received.
The Raicoon acquisition and the guidance hold are the two items to watch as post-earnings commentary develops. Whether management's $140–190 million revenue range narrows — or shifts — on the next update in June will likely determine whether the short base stays dormant or reactivates.
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