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System1
(NYSE:SST)
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Rating:48Neutral
Price Target:
$5.00
▲(164.55% Upside)
Action:Reiterated
Date:09/09/26
The score is held down primarily by very weak financial performance (declining revenue, large losses, negative equity, and significant cash burn). Technicals are supportive with price well above major moving averages, but overbought indicators raise near-term risk. Valuation is constrained by negative earnings and no dividend, while the earnings call was mixed—product traction and debt reduction helped, but guidance was suspended amid significant monetization-driven volatility.
Positive Factors
Owned-Product User Growth
Broad session growth across owned properties indicates rising user engagement and gives System1 more opportunities to monetize intent. MapQuest, Startpage and mobile usage gains diversify the product base, while sustained traffic can support advertising scale if conversion and monetization stabilize.
Negative Factors
Revenue Contraction
Q2 revenue fell 61% year over year to $30.2 million, with marketing revenue down 80% and products revenue down 19%. Such contraction weakens scale economies and makes fixed costs harder to absorb, leaving the business dependent on a durable recovery in demand and monetization.
Read all positive and negative factors
Positive Factors
Negative Factors
Owned-Product User Growth
Broad session growth across owned properties indicates rising user engagement and gives System1 more opportunities to monetize intent. MapQuest, Startpage and mobile usage gains diversify the product base, while sustained traffic can support advertising scale if conversion and monetization stabilize.
Read all positive factors
System1 (SST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.17M
Dividend Yield0.32%
Average Volume (3M)750.99K
Price to Earnings (P/E)―
Beta (1Y)0.92
Revenue Growth-42.93%
EPS Growth-17.25%
CountryUS
Employees250
SectorIndustrials
Sector Strength72
IndustrySoftware - Application
Share Statistics
EPS (TTM)-11.33
Shares Outstanding8,708,922
10 Day Avg. Volume1,763,964
30 Day Avg. Volume750,994
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.01
Price to Sales (P/S)0.12
P/FCF Ratio-7.34
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$6.50Price Target Upside243.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-7.92
Revenue Forecast (FY)$235.90M
System1 Business Overview & Revenue Model
Company Description
System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States and internationally. It operates in two segments: Owned and Operated Advertising, and ...
How the Company Makes Money
System1 primarily makes money from advertising-related revenue generated in two main ways: (1) Monetization of owned-and-operated properties and (2) Advertising/marketing services delivered through its ad-tech platform. On its owned-and-operated s...
System1 Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Negative
The call highlighted meaningful product-level progress: strong session growth across owned products, notable momentum at CouponFollow and MapQuest, early commercialization of first-party data (IntentStream), product innovations and a materially improved debt position. However, these positives were substantially offset by severe near-term financial deterioration driven by Google monetization volatility: total revenue down 61% YoY, marketing revenue down 80% YoY, and adjusted EBITDA down 83% YoY. Management is focused on partner diversification, monetization stabilization, and investing behind high-return product opportunities, but the company faces material short-term headwinds and has suspended guidance until stability returns.Positive Updates
Session and User Growth Across Products
Total sessions to owned and operated product sites increased 31% year-over-year and 5% sequentially; MapQuest sessions up 25% year-over-year in H1 2026; Startpage user sessions increased 11% quarter-over-quarter with mobile app sessions up 63% year-over-year.
Negative Updates
Sharp Revenue Decline
Q2 revenue was $30.2 million, down 61% year-over-year and 19% sequentially; even excluding the impact of owned & operated marketing, revenue trends remain materially negative (management reported pro forma adjustments).
Read all updates
Q2-2026 Updates
Positive
Negative
Session and User Growth Across Products
Total sessions to owned and operated product sites increased 31% year-over-year and 5% sequentially; MapQuest sessions up 25% year-over-year in H1 2026; Startpage user sessions increased 11% quarter-over-quarter with mobile app sessions up 63% year-over-year.
Read all positive updates
Company Guidance
System1 said it will not provide Q3 or full‑year guidance given continued monetization volatility, but offered directional guidance and many concrete metrics: Q2 revenue was $30.2M (‑61% YoY, ‑19% sequential), products revenue $19.5M (‑19% YoY, +3% sequential; 64% of revenue), marketing GAAP revenue $10.7M (‑80% YoY, ‑42% sequential), adjusted gross profit $25.5M (‑38% YoY, ‑10% sequential), products segment profit $17.5M (‑23% YoY, +1% sequential; 65% of total profit), marketing segment profit $9.5M (‑51% YoY, ‑24% sequential), adjusted EBITDA $1.9M (‑83% YoY, ‑29% sequential) with management expecting adjusted EBITDA to increase sequentially for the remainder of the year, operating expenses (net of add‑backs) $23.6M (‑20% YoY, ‑8% sequential), pro forma cash $16.2M, total outstanding debt reduced to $150M (from $302.6M) and pro forma net leverage 5.88x; product usage trends cited included total sessions +31% YoY and +5% sequential, Startpage sessions +11% sequential (mobile app sessions +63% YoY), MapQuest sessions +25% YoY in H1, CouponFollow organic sessions +11% vs Q1 and gross profit from paid acquisition +37% YoY, and partner network metrics of 59 active partners (+5% sequential) averaging >$155K quarterly with 28 scaled partners (47% of active) after a period when partner net revenue exceeded $100K/day in Apr–May before a >30% drop in late May/early June (about 50% recovered by end of June).System1 Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
18
Very Negative
Cash Flow
17
Very Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 180.94M | 266.13M | 343.93M | 401.97M | 664.94M | 688.39M |
| Gross Profit | 7.30M | -22.17M | -41.26M | -31.68M | -55.10M | 86.64M |
| EBITDA | 17.38M | 20.82M | -8.49M | -7.59M | -51.13M | 64.72M |
| Net Income | -91.67M | -65.34M | -74.67M | -222.97M | -367.45M | 33.00M |
Balance Sheet | ||||||
| Total Assets | 291.37M | 404.97M | 459.13M | 605.47M | 1.16B | 256.91M |
| Cash, Cash Equivalents and Short-Term Investments | 40.48M | 86.89M | 63.61M | 135.34M | 8.90M | 47.90M |
| Total Debt | 300.64M | 314.73M | 274.98M | 355.42M | 422.55M | 170.45M |
| Total Liabilities | 344.38M | 387.55M | 374.13M | 436.15M | 689.78M | 285.31M |
| Stockholders Equity | -26.67M | 30.47M | 80.26M | 135.28M | 392.02M | -28.40M |
Cash Flow | ||||||
| Free Cash Flow | -77.76M | -4.19M | -5.29M | -32.70M | -17.66M | 54.17M |
| Operating Cash Flow | -66.99M | -4.15M | -5.25M | -24.74M | -7.29M | 60.70M |
| Investing Cash Flow | -9.33M | -6.72M | -6.25M | 203.18M | -454.45M | -6.54M |
| Financing Cash Flow | 16.42M | 31.30M | -63.96M | -74.07M | -27.73M | -34.59M |
System1 Technical Analysis
Positive
1.89
Price Trends
2.16
Positive
2.67
Positive
3.11
Positive
Market Momentum
0.32
Negative
80.95
Negative
84.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SST, the sentiment is Positive. The current price of 1.89 is below the 20-day moving average (MA) of 2.23, below the 50-day MA of 2.16, and below the 200-day MA of 3.11, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 80.95 is Negative, neither overbought nor oversold. The STOCH value of 84.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SST.
System1 Risk Analysis
System1 disclosed 63 risk factors in its most recent earnings report. System1 reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
System1 Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.05B | 63.10 | 10.41% | 3.80% | 12.26% | -41.84% | |
65 Neutral | $443.04M | -17.34 | -2.81% | 7.45% | 12.33% | -160.91% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
51 Neutral | $486.66M | -4.55 | -75.24% | ― | -33.13% | -511.56% | |
48 Neutral | $40.17M | -0.44 | -1180.76% | 0.32% | -42.93% | -17.25% | |
47 Neutral | $127.92M | -2.87 | -468.47% | ― | 2.62% | 19.50% | |
45 Neutral | $58.99M | -2.62 | -20.12% | ― | -29.52% | -564.69% |
* Industrials Sector Average
SST
System1
5.00
-2.88
-36.55%
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System1 Corporate Events
Business Operations and StrategyFinancial Disclosures
System1 Reports Q2 Revenue Amid Ongoing Operating Losses
Negative
Aug 5, 2026
On August 5, 2026, System1, Inc. reported unaudited results for the quarter ended June 30, 2026, showing revenue of $30.2 million and continued operating losses, including an operating loss of $8.3 million and a net loss of $12.6 million. The quar...
Business Operations and StrategyExecutive/Board ChangesPrivate Placements and FinancingShareholder Meetings
System1 Completes Debt Exchange and Governance Restructuring
Positive
Jul 24, 2026
On July 22, 2026, System1 held its annual meeting, where shareholders approved the issuance of Series A Cumulative Convertible Preferred Stock, elected three Class I directors for terms expiring in 2029 and ratified Deloitte and Touche LLP as the ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.