In a report released today, Thomas Boyes from TD Cowen maintained a Buy rating on Stem Inc (STEM – Research Report), with a price target of $7.00.
Thomas Boyes has assigned a Buy rating to Stem Inc due to a multitude of reasons.
Firstly, the company has shown an impressive performance in the third quarter of 2023, recording bookings of $676.4 million. This is largely due to the company’s growing strength in the muni and co-op markets. Furthermore, the firm is on its way to report positive adjusted EBITDA in the next quarter, and management expects to maintain this positivity throughout the fiscal year of 2024.
Continuing with the reasons for the Buy rating, Boyes highlights the company’s strategic relationship with SB Energy. This partnership offers a potential opportunity of 10GWh+ which enhances the company’s future visibility. Stem has also been successful in growing its market share in the muni and co-op market. This was achieved partly by leveraging its supply chain and providing hardware guarantees to customers. Additionally, Stem’s contract with EDPR NA Distribution Generation for a project with the Mohave Electric Cooperative signifies its effective cross-selling capabilities. Finally, the company’s improving working capital and expected lower battery costs add to its financial strength, making it a worthwhile investment.
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Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is neutral on the stock.
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Stem Inc (STEM) Company Description:
Star Peak Energy Transition Corp is a blank check company.
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