Stem’s huge opportunity and its very impressive customer list outweigh the risk facing the shares at this point. On the other hand, as I pointed out in a recent, previous column, the sentiment towards SPAC stocks has soured somewhat recently, increasing the risk facing Star Point Energy. Nevertheless, it’s less expensive than many of its SPAC peers, and the company, unlike most other SPAC names, expects its EBITDA to turn positive in 2022. Still, based on the 2022 figure, STPK stock is trading at a pro-forma price-sales ratio of 16, which is quite expensive. The company’s revenue came in at just $33 million last year, although it says that it expects its sales to jump to $147 million in 2021 and $347 million in 2022. As the sector becomes more lucrative, much larger companies, such as General Electric (NYSE: GE) and NextEra Energy (NYSE: NEE), could very well enter the sector.Īt this time, Star Peak Energy is trading at a post-merger valuation, based on certain assumptions, of $5.5 billion. In addition to American Superconductor, Itron (NASDAQ: ITRI) and ESCO Technologies (NYSE: ESE) offer similar solutions to those of Stem. Harry Hobbs, an Area Director of Engineering for the company, said that Stem’s “real-time data.is the real differentiator” that allowed him to triple his return on investment, according to Stem. Stem reported that it had helped InterContinental Hotels “halt rising energy costs” in California. “ AMSC stock has surged over 200% in the last 12 months. ![]() The company noted that the revenue of its “new energy systems” was “driven by … renewable projects in the United States, along with chip factories overseas. ![]() American Superconductor refers to these products as “new energy systems.” In Q3, the Grid unit’s sales increased 12% year-over-year. The company says that its Grid business, featuring products that help companies and utilities regulate electricity flow and the grid, is delivering consistent growth. Īlso, another company which has benefited significantly from these trends is American Superconductor (NASDAQ: AMSC ). And by “lowering energy costs, stabilizing the grid, alleviating intermittency and reducing carbon emissions, Stem makes itself and STPK stock very appealing. Importantly, given the latter points, Stem says that it reduces its customers’ “energy costs” by 10%-30%, using its AI. This is also likely to make batteries and grid management more important is the “electrification of transportation,” which in all probability will make electricity even more important and meaningfully more expensive over the longer term. Spurred by increased pressure to become “green,” many more companies and governments will increase their utilization of renewable energy. Moreover, the company correctly points out that the hugely increased popularity of renewable energy has made managing electricity flow much more 0complex for large businesses, while greatly increasing the difficulty of running grids for utilities. InvestorPlace - Stock Market News, Stock Advice & Trading Tipsħ Overvalued Stocks Investors Just Don’t Get Tired OfĪdditionally, the combination of renewable energy systems and batteries rapidly proliferating, Stem appears to be well-positioned to exploit that trend. ![]() Using artificial intelligence (AI), Stem says it provides enterprises with “integrated battery storage systems, network integration and battery optimization.” Battery concept powering electric vehicle.Īs my headline indicates, however, I do think that Stem faces significant risks, including potentially strong competition.
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