Stem downgraded to Underperform at BofA on ‘waning confidence’

As previously reported, BofA analyst Julien Dumoulin-Smith downgraded Stem to Underperform from Neutral with a price target of $5, down from $9, telling investors that the firm’s "confidence in estimates is increasingly strained." While management is suggesting that a rapid scale up in services can bridge a deceleration in hardware sales, the firm lacks confidence in the medium-term with the potential for a slower realization on a build-up of recurring software revenues, it said. BofA has reduced its estimates "modestly" and calls consensus "a bit generous."