Stem tech stock8/24/2023 ![]() In 2022, 20 the estimated revenue growth falls to 115%, 67%, 42% and 26% respectively. And there is an estimate of 348% growth in revenue for 2021 to $147 million compared to the estimate of $33 million in 2020, but then the following years there is a decline for revenue growth. Due to the capital expenditures, the net profitability may be negative. Next, there is a pro forma gross profit, not net profit. With a recent market capitalization of $1.136 billion, this implies a ratio of about 7.72 times of market capitalization to revenue. The projected revenue for 2020 is $33 million, and the projected revenue for 2021 is $147 million. The free cash flow estimates indicate positive numbers starting in 2023. ![]() Yes, the company highlights its robust revenue growth until 2026, but these are purely the company’s projections. The investor presentation data that Stem has used shows a few significant concerns about valuation. Investors should not make well-informed decisions based on the prospects themselves without ignoring one key parameter: valuation. ![]() It should be analyzed with caution and skepticism, plus an adequate degree of doubt. The leadership team has a lot of experience and the marketing material uses words such as disruption and exponential growth, lowest cost generation, rapid cost reductions, significant scale, and visible growth. I also like the fact that Stem has about $525 million net cash, available for growth, and on a Pro forma for transaction $0 debt on the balance sheet. The Hardware + Network Integration has the lowest gross margin of about 10%-30%, while the other two business segments have gross margins of about 80%. Unlike other SPAC mergers, that have often elevated companies with almost non-existent sales, Stem in its investor presentation shows that its business model can bring in three sources of revenue. Stem’s customers include Fortune 500 companies, and the company has its focus on revenue. ![]() What does Stem do? “Stem delivers and operates smart battery storage solutions that maximize renewable energy generation and help build a cleaner, more resilient grid.” And interestingly enough, Stem is “the world leader in AI-enabled smart energy storage.” They’re looking for a green future with an emphasis on the power sector to achieve a carbon pollution-free power sector by 2035. President Joe Biden’s administration has decided to invest in modern, sustainable infrastructure now and deliver an equitable clean energy future.Īn investment of a $2 trillion accelerated investment to meet the ambitious climate progress that science demands. STEM Stock: The Positive News to Consider So this 800 times increase in market capitalization seems too optimistic now. They may get further impressed by commentary mentioning that Citron’s Investor Letter called STEM stock’s predecessor “a future $800 billion, Tesla like boomer, in the US markets.”īut when you read research like this, be very cautious - not because the conclusion is not plausible, but mainly because it may be too optimistic.Ĭonsider that the current market capitalization of Star Peak Energy Transition Corp is $1.136 billion as of the close on April 23, 2021. Do Not Get Excited Without Research and Due DiligenceĪnother investor may have read that news that “Star Peak Energy (STPK) Will Dominate Tesla in the Energy Storage Game’ Says Citron Capital” from Insider Monkey.
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