“REBUILDING THE GRID: The power grid is an antiquated one-way system reliant on a lot of aging infrastructure. The grid needs to be rebuilt into a two-way internet-like system that allows energy to flow from any producer to any consumer. It needs to be an open system like the internet so anyone can build applications on top of it—whether those apps are electric cars, smart homes, or new kinds of businesses no one has thought of yet.”― Hemant Taneja “Unscaled: How AI and a New Generation of Upstarts Are Creating the Economy of the Future”
Stem Inc. STPK (SPAC)
Publication Date: 30 January 2021
Links: Company Website | Investor Presentation | Start Your Own Research
Stock Price: $27.10
Market Cap: $1.5 B
Sector: Software & Infrastructure
Location: San Francisco
CEO: John Carrington
Company Profile: Stem works with developers, utilities, EPCs, independent power producers, and businesses to transform how they create, store and manage renewable energy. With our comprehensive services offerings and our energy services software, Athena, we help our customers achieve their revenue, savings, sustainability, and resiliency goals.
Future Growth Rate: 32.5%
Future EPS: $0.10 -> EBITDA 2022 of $28M / 2 = $14 / 135.4M shares outstanding = $0.10 (Investor Presentation p. 31, 32)
Price to Revenue Ratio: TBD
Gross Profit Margin: TBD
Total Cash vs Long Term Debt: ~$525M vs $0 (Investor Presentation p. 22)
Analysis Summary: This one feels like it is a big fish, but it is proving elusive to get enough information about it and its main competitor (we think), AutoGrid, which is rumoured to become IPOD. We should maybe delay this one and include an analysis of AutoGrid at the same time. We know the catalyst is the decentralization of the energy markets enabled by renewable energy production and battery storage but we are still unsure of the moat or key insight for Stem. Athena and the AI software being the brains behind the battery is great, but we feel that over the years Market Participation could be the ace up the sleeve for their revenue as they arbitrage the price of energy.
Strike Price: $25
Risk Factor: TBD
Hold Time: 5 years
Projected Price: TBD
Catalyst: Batteries & Energy Market Decentralization
Rating: TBD
Portfolio Type: Core 💎
Green Garage Investing’s Recommendation: We were unable to complete our analysis of Stem Inc. but we also really like the potential of this company given it’s capabilities and the space it is in that has large secular trends (renewable energy and energy decentralization) in its favour. With a long term perspective, buying a tranche or two at this point is not at all unreasonable as we await more info.
