Please ensure Javascript is enabled for purposes of website accessibility

Why Stem Shares Jumped Today

By Howard Smith – Nov 10, 2021 at 4:16PM

Key Points

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Stem's energy storage solutions are bringing fast-growing revenue and order backlogs from customers seeking to become more energy efficient and decarbonize their operations.

What happened

Stem (STEM 3.03%), maker of smart battery storage solutions, reported record revenue and assets under management (AUM) in its third-quarter financial results last night, sending shares as much as 13% higher Wednesday morning. As of 2:50 p.m. EST, Stem stock was still 5.75% higher on the day. 

So what

Stem uses artificial intelligence (AI)-driven technology to provide energy storage that aims to maximize clean energy and renewable energy generation. Its revenue of $39.8 million for the three-month period ended Sept. 30, grew 334% compared to the prior-year period, and was more than double its sales from just the prior quarter. The company also reaffirmed its prior guidance for full-year 2021 revenue of $147 million. 

large-scale battery storage in a field with pine trees in background.

Image source: Getty Images.

Now what

Stem CEO John Carrington said the company's backlog grew 25% sequentially, and summed up the results stating, "Customers increasingly demand our smart energy solutions enabled by Athena, our industry-leading software platform."

After going public earlier this year, Stem is adequately capitalized with $576 million in cash, cash equivalents, and short-term investments and no debt. The company said its 12-month forward project pipeline has soared by 41% just since the prior three-month period. Management credited expansion into new markets, particularly with front-of-the-meter (FTM) battery storage opportunities which are typically utility-scale systems.

The stock hit its highs in late June and early July, and has dropped more than 30% since that time. Today, investors liked what they heard, and are looking forward to 2022 guidance the company plans to provide during its fourth-quarter and full-year 2021 report early in 2022. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Stem, Inc. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.