System1 (SST) AI Stock Analysis

• Market Cap: $103.27M
• Dividend Yield: N/A
• Average Volume (3M): 20.28K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• Revenue Growth: -19.84%
• EPS Growth: 49.40%
• Country: US
• Employees: 300
• Sector: Industrials
• Sector Strength: 85
• Industry: Specialty Business Services
• EPS (TTM): -1.70
• Shares Outstanding: 7,980,000
• 10 Day Avg. Volume: 39,131
• 30 Day Avg. Volume: 20,284
• PEG Ratio: -0.20
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -24.34
• Enterprise Value/Market Cap: 8.02
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 8.65
• Enterprise Value/Ebitda: 23.13
• 1Y Price Target: $5.00
• Price Target Upside: 29.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 45 Neutral
• Price Target: $4.00 ▲(3.36%Upside)

System1's overall stock score reflects significant financial challenges, including declining revenues, high leverage, and negative cash flows. While there are some positive signs from recent earnings, such as increased profitability in certain product areas, these are overshadowed by broader financial and operational risks. The technical analysis and valuation further highlight the stock's vulnerabilities, with mixed short-term signals and unattractive valuation metrics.

System1 Business Overview & Revenue Model

Company Description

System1, Inc. (SST) is a technology and digital marketing company that operates in the sectors of consumer internet and digital advertising. The company specializes in developing and deploying advanced technologies that enhance the online experience for users and drive high-quality traffic to its partners. System1's core products and services revolve around its proprietary platform that integrates search, social, and display advertising to optimize the user acquisition process.

How the Company Makes Money

System1 generates revenue through a performance marketing model that focuses on acquiring and monetizing user traffic. Its primary revenue streams include search advertising, where they earn by directing traffic to partner websites and receiving a share of the advertising revenue generated. Additionally, System1 engages in affiliate marketing, earning commissions by promoting and driving traffic to third-party products and services. The company's earnings are also bolstered by partnerships with major search engines and digital advertising networks, which facilitate the delivery of targeted advertisements to users. These partnerships, alongside their technology platform, play a crucial role in optimizing ad spend and maximizing return on investment for advertisers.

System1 Financial Statement Overview

Summary

System1 faces several financial challenges, characterized by declining revenues, profitability issues, high leverage, and negative cash flows. While there are minor improvements in certain areas, the overall financial health of the company is concerning, with significant risks in terms of liquidity and operational sustainability.

Income Statement

System1 has experienced declining revenues and profitability over recent periods, with a negative net profit margin and EBIT margin in TTM (Trailing-Twelve-Months). This reflects challenges in generating profit from its operations, despite a slight improvement in EBITDA margin. Revenue growth has been negative, indicating a downward trajectory.

Balance Sheet

The balance sheet shows high leverage with a substantial debt-to-equity ratio, which poses a risk in volatile market conditions. The return on equity is negative due to consistent net losses, and the equity ratio has been decreasing, indicating a weakening equity position. However, the company maintains some liquidity with cash equivalents available.

Cash Flow

Cash flow metrics indicate significant challenges, with negative free cash flow and operating cash flow to net income ratio suggesting inefficiencies in converting revenue to cash. Free cash flow has been decreasing, highlighting potential liquidity issues and limitations in funding operations without external financing.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
333.52M	343.93M	401.97M	826.65M	688.39M	475.98M
	Gross Profit
95.70M	152.36M	46.72M	305.54M	675.06M	134.98M
	EBIT
-75.93M	-88.60M	-85.99M	50.83M	-13.33M	42.62M
	EBITDA
7.38M	14.00M	-4.48M	-427.61M	64.72M	52.92M
	Net Income Common Stockholders
-80.02M	-74.67M	-227.22M	33.00M	21.03M	16.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
43.91M	63.61M	135.34M	24.61M	53.15K	29.01M
	Total Assets
419.15M	459.13M	605.47M	1.16B	517.62M	218.68M
	Total Debt
270.28M	274.98M	355.42M	422.55M	450.00K	179.97M
	Net Debt
226.37M	211.37M	220.07M	397.94M	396.85K	150.96M
	Total Liabilities
351.50M	374.13M	436.15M	687.67M	60.43M	266.91M
	Stockholders Equity
67.19M	80.26M	135.28M	383.98M	457.19M	-48.23M
Cash Flow		Free Cash Flow
-6.47M	-5.29M	-32.70M	-17.66M	-7.78M	40.42M
	Operating Cash Flow
-5.22M	-5.25M	-24.74M	-7.29M	-1.24M	46.55M
	Investing Cash Flow
-6.18M	-6.25M	203.18M	-454.45M	-6.54M	68.17M
	Financing Cash Flow
-21.11M	-63.96M	-74.07M	-27.73M	450.00K	-128.07M

System1 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SST, the sentiment is Negative. The current price of 3.87 is below the 20-day moving average (MA) of 3.97, below the 50-day MA of 3.88, and below the 200-day MA of 7.52, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 48.03 is Neutral, neither overbought nor oversold. The STOCH value of 25.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SST.

System1 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SGRP	67 Neutral	$24.86M	2.10	-11.99%	―	-12.74%	751.07%
Sector *	66 Neutral	$4.47B	12.21	5.40%	3.65%	4.14%	-12.00%
OMEX	53 Neutral	$34.94M	―		―	-2.44%	―
SST	45 Neutral	$103.27M	―	-80.45%	―	-19.84%	49.40%
NTIP	45 Neutral	$27.42M	―	-5.44%	8.33%	-87.89%	-44.93%

System1 Corporate Events

System1 Announces Reverse Stock Split Implementation

On June 11, 2025, System1, Inc. announced the implementation of a reverse stock split for its Class A and Class C Common Stock at a ratio of one post-split share for every ten shares, effective at 5:00 p.m. Eastern Time. This move, aimed at regaining compliance with NYSE listing standards, will see the company’s Class A Common Stock begin trading on a split-adjusted basis on June 12, 2025, under the existing symbol ‘SST’ with a new CUSIP number. The reverse stock split reduces the number of issued and outstanding shares and proportionally adjusts the number of shares issuable under equity incentive plans, without affecting the par value or authorized shares. Stockholders will receive cash in lieu of fractional shares, and the split does not alter any stockholder’s percentage interest in the company’s equity.

The most recent analyst rating on (SST) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.

System1 Announces Reverse Stock Split Effective June 11

On June 10, 2025, System1, Inc. held its Annual Meeting of Stockholders, where several key proposals were approved, including amendments to its 2022 Incentive Award Plan and 2024 Stock Appreciation Rights Plan. The company also announced a reverse stock split at a 1-for-10 ratio, effective June 11, 2025, to increase the trading price of its Class A Common Stock and maintain its NYSE listing. These changes aim to enhance System1’s market positioning and operational flexibility.

The most recent analyst rating on (SST) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.

System1 Approves Base Salary for President Ursini

On May 22, 2025, System1, Inc. announced that its Compensation Committee approved a base salary of $450,000 per annum for Charles Ursini, the company’s President and Chief Operating Officer, effective May 19, 2025. Previously, Mr. Ursini did not receive a base salary for his role, but he will continue to receive the same benefits as other employees, such as medical and dental coverage.

The most recent analyst rating on (SST) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.

System1 Releases Q1 2025 Financial Information

On May 6, 2025, System1, Inc. released supplemental financial information for the quarter ending March 31, 2025, on its website. The company also made available an investor presentation, which may be used for future investor engagements. This release provides stakeholders with detailed insights into the company’s financial performance and strategic positioning, potentially impacting investor perceptions and market positioning.

System1 Board Restructures After Director Resignations

On April 15, 2025, Dexter Fowler and Jennifer Prince resigned from the Board of Directors of System1, Inc., with Fowler serving on the Nominating & Corporate Governance Committee and Prince on the Compensation Committee. Their resignations were not due to any disagreements with the company. Following their departure, the Board decided on April 17, 2025, to reduce its size from eleven to nine members and reassigned CEO Michael Blend from a Class III to a Class I director to maintain balance among the board’s classes.