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Stem Powers Hungary's Biggest Solar Power Plant With AI

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Stem (STEM - Free Report) recently announced that its solar monitoring and optimization solutions are operational now in Hungary’s largest solar power plant, Mezocsát. This is the company’s fifth utility-scale project in Hungary and strengthens its leadership in Eastern Europe.

The 304 MW DC power plant uses Stem’s Athena platform, which includes AlsoEnergy’s PowerTrack and PowerManager Control Solutions, to reduce Hungary’s dependence on natural gas and increase renewable energy production.

EXTOR Energy, a Hungarian EPC and Stem service partner, is the operations and maintenance provider for the project. It works with Stem to enhance their PV projects with advanced storage solutions.

The Mezocsát project marks the largest continuous solar park in Eastern Europe, which can produce 372 GWh of electricity annually. It is connected to the Hungarian grid and supports the country’s goal of energy sovereignty and production.

Stem, Inc. Price and Consensus


Stem, Inc. Price and Consensus

Stem, Inc. price-consensus-chart | Stem, Inc. Quote


Stem has seen success in its international strategy with the activation of clean energy assets, especially as Europe prepares for the Net-Zero Industry Act. It looks forward to delivering value and support for more clean energy projects in existing and expanding markets.

Stem Leverages on AI to Boost Prospects

Stem benefits from a strong portfolio of AI-driven clean energy software and services. Improvement in supply chain issues, labour shortages and related regulatory actions have been driving the top line.

In the first quarter of 2023, Stem recorded a 63% year-over-year increase in revenues to $67 million. Storage Services revenues increased 22% sequentially and Solar Services revenues were up 7% sequentially.

Stem’s recent project with Sysco integrates its Athena software into their Riverside EV Hub, reflecting continued momentum in the EV charging space.

The increased adoption of its Athena platform due to its optimization capabilities has been noteworthy. Stem continues to leverage on AI-assisted coding as well as innovate and adapt Athena to increase productivity in the subsequent quarters.

This Zacks Rank #4 (Sell) company reaffirms its guidance for fiscal 2023. It expects total revenues between $550 million and $650 million, suggesting a 65% year-over-year growth at midpoint.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for second-quarter 2023 revenues is pegged at $94.37 million, indicating a 40.95% growth from the year-ago quarter’s reported figure.

The consensus mark for second-quarter loss remained unchanged at 23 cents per share in the past 30 days.

Stem Faces Stiff Competition

Per an article by Gartner, the worldwide spending in IT services is expected to grow by 9.1% to $1.36 trillion in 2023, despite macroeconomic headwinds. The IT services segment will continue its growth through 2024, primarily driven by the infrastructure-as-a-service market that is expected to witness around 30% growth in 2023.

However, shares of Stem have plunged 37.3% year to date compared with the Zacks Computers – IT Services industry’s increase of 14.4% over the same time frame.

The underperformance has been primarily due to challenging macroeconomic and geopolitical environments, unfavourable regulatory changes and stiff competition.

Stem operates in a highly-competitive market for clean energy software and services, where it faces competition from players like SES AI (SES - Free Report) , ESS Tech (GWH - Free Report) and PAR Technology (PAR - Free Report) .

Shares of PAR Technology have gained 21.7% year over year. Shares of SES AI and ESS Tech have lost 21.6% and 38.7% year over year, respectively.

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