# SThree plc (STEM.L) fundamentals

Data as of 2026-09-08. LSE, United Kingdom. Sector: Industrials / Professional Services. Price 279p, market value 337 millionp.

## Valuation
- **P/E (trailing): 27.9×** (5-yr avg 1159.7×, 3-yr avg 1037.8×). SThree plc trades at 27.9× trailing earnings, well below its own five-year average of 1159.7×: cheap by its own standards. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 19.5×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 0.1×**. Each dollar of revenue is priced at 0.1×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 1.6×**. The shares trade at 1.6× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 2.7×**. Enterprise value is 2.7× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 26.7%** (5-yr avg 0.1%). Free cash flow equals 26.7% of the market value, above its five-year average of 0.1%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 3.6%**. The inverse of the P/E: 3.6% of the price is earned each year.

## Profitability
- **Gross margin: 24.1%**. SThree plc keeps 24.1% of revenue after the direct cost of what it sells, a thin margin typical of retail, distribution and commodity businesses.
- **Operating margin: 3.3%**. 3.3% of revenue is left after running the business, which leaves little cushion in a downturn.
- **Net margin: 1.4%**. 1.4% of each dollar of sales reaches the bottom line.
- **Return on equity: 7.5%**. 7.5% on shareholders' equity is weak; the business earns little on the capital its owners have in it.
- **Return on invested capital: 26.8%**. Return on all capital, debt included, is 26.8%: comfortably above what that capital costs.
- **Return on assets: 13.9%**. Each dollar of assets produces 13.9% of profit.

## Growth
- **Revenue growth (1 yr): -12.8%** (3-yr -7.4%/yr, 5-yr 1.6%/yr). Revenue fell 12.8% over the last year, against 1.6% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): -62.2%** (3-yr -29.5%/yr, 5-yr 3.1%/yr). Earnings per share fell 62.2%, slower than revenue, so margins compressed.
- **Free-cash-flow growth (3 yr): 10.9%/yr**. Free cash flow has compounded at 10.9% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 0.36**. Debt is 0.36 times equity: a conservative balance sheet.
- **Net debt / EBITDA: 0.1×**. It would take 0.1 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 26.5×**. Operating profit covers interest 26.5× over, a safe margin.
- **Current ratio: 1.97** (quick 1.97). Current assets cover the next year's liabilities 1.97 times.
- **Altman Z-score: 4.88**. A Z-score of 4.88 places the company in the safe zone for bankruptcy risk.
- **Piotroski F-score: 4/9**. 4 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 5.02%** (0p per share, trailing). SThree plc yields 5.02%, an income-level yield.
- **Payout ratio: 105%** (38% of free cash flow). The dividend exceeds earnings (105% payout), though free cash flow still covers it.
- **Shareholder yield: 14.2%**. Dividends plus net buybacks return 14.2% of the market value a year.

## Analyst view
- **Analyst consensus: strong_buy** (4 analysts). 4 analysts cover SThree plc; the consensus is strong_buy, with an average price target of 261p (-6% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 45.1%** (YTD 48.0%, 3-mo 66.0%). The shares are up 45.1% over twelve months including dividends.
- **From 52-week high: -7.5%** (110.7% above the low). Trading 7% below its 52-week high.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 55**. An RSI of 55 is neutral.
- **Beta (1 yr): 0.68** (volatility 43%). Beta of 0.68 against the FTSE All-Share: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=STEM.L · Page: https://foliofundamentals.com/stocks/stem.l

Not investment advice.