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Stem, Inc. (STEM) - >>> 3 Artificial Intelligence Stocks Leading the New Wave


TipRanks

December 6, 2021


https://finance.yahoo.com/news/3-artificial-intelligence-stocks-leading-102641095.html


Next up, we have Stem, a company that uses AI tech to drive clean energy monitoring and storage systems. In short, this company has put together an integrated system – software to solve problems inherent in energy storage batteries and to maximize renewable energy generation for a cleaner, more resilient energy grid. This is the dream of Green Energy boosters, and Stem’s AI is the heart of its system.

AI allows the company’s Athena software platform to enable utility bill savings of 10% to 30% for Stem’s customers. The system is capable of machine learning, and can learn when and how to switch from grid power to onsite generation to battery power for maximum efficiency, energy savings, and cost savings.

Stem, Inc. is a pure-play smart energy storage company, and it’s the first of its kind to go public. The company entered the public markets through a SPAC transaction back in April of this year; the combination, with Star Peak Energy Transition Corporation, was approved on April 27 and the STEM ticker debuted on April 29. Star Peak brought $383 million in cash to the combo, as well as $225 million PIPE funding, for $608 million in new capital for Stem. The company has a current market cap of $2.57 billion, after the stock as slid 34% since the SPAC completion.

Even though the stock has slid, Stem’s business is thriving. Revenue in 3Q21 reached $39.8 million, up a whopping (no other way to put it) 334% from the same quarter last year. The company’s net income turned positive in Q3, going from a net loss of 47 cents per share one year ago to a net gain of 85 cents per share. In total dollars, it was a shift from an $18.8 million net loss in 3Q20 to a $115.6 million net profit in 3Q21.

Covering STEM for Wolfe Research, Steve Fleishman says, “Stem’s Athena software has long been the cornerstone of the company and makes an 80%+ margin on revenues under 10- to- 20-year contracts. We also like that the company is hardware/battery agnostic. Both have helped drive a solid margin profile today, one that we see getting better. Stem also stands to benefit from the scarcity value of being one of two pure-play battery cos.”

Fleishman is bullish, and gives the shares an Outperform (Buy) rating. His $35 price target implies an upside of 97% by the end of next year. (To watch Fleishman’s track record, click here.)

While there are only 2 reviews on record for this stock, both agree – it’s a Buy proposition. The average price target is $40.50, and the current share price is $17.77, for a 127% one-year upside potential. (See Stem’s stock analysis at TipRanks.)

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