Expanding the Opportunity in the Fast-Growing Microgrid Megatrend
|52 Week Range||$3.80-$15.28|
|Avg. Daily Vol. (30 day)||116,610|
|Shares Out (MM)||15.23|
|Market Cap (MM)||$62.74|
|Enterprise Value ($MM)||$86.99|
|Revenue TTM (MM)||$71.82|
|Fiscal Year End||March|
- Through its transformation into a comprehensive energy solutions provider, Capstone has advanced its position in the fast-growing microgrid or distributed energy resources (DER) industry.
- Its proprietary microturbine energy technology solution remains the cornerstone, but now the company has expanded the toolbox to leverage the fast-growing microgrid industry with alternative energy generation products, energy storage products, and advanced hydrogen products to provide customers a total green energy solution.
- According to Capstone, its platform can reduce energy costs, ensure power availability, and meet CO2 reduction goals with a near-zero emissions profile, positioning the product within a customer's environmental, social & governance (ESG) framework.
- The global microgrid market is expected to grow at a CAGR of 19% over the period of 2020-2025, driven by the increased deployment of renewable energy sources in microgrids.
- The company expects its Energy-as-a-Service (EaaS) business to expand swiftly. It is focusing heavily on building a long-term rental fleet that provides the highest margin (>60%), with the aim of sustained profitability and stable cash flows. Capstone’s current rental fleet stands at 13.1 MW.
- The company presented key revenue growth drivers in its latest investors’ presentation emphasizing the expertise of its direct sales team its targeted pricing strategy, and its goals to improve build quality to attract and retain customers, explore new geographies, and widen the distributor network.
- Capstone also provides custom heat recovery solutions through new partner Alfa Laval, and food waste management or recycling solutions by aligning with Waste2ES.
- Our prior content on CGRN can be accessed HERE.
Capstone has experienced various cycles and shifts in the industry over the past decade. Still, management believes it has never been better positioned to capitalize on what is now a paradigm shift in how energy is viewed, created, and delivered. The transition to Capstone Green Energy, and the expanded products and services, which now include storage and other energy technologies, position it to better leverage the microgrid megatrend currently taking place, and should provide the company with a broader set of solutions, create a larger TAM, and solidify stronger partnerships with customers. The proliferation of renewables, a focus on energy security and reliability, outdated power grids, and EaaS drive change. The company's long history as a leading supplier of low-emission micro gas turbines will lead the push forward.
Capstone’s expansion and transformation are still in the early stage, and execution risk exists. In addition, despite significant YOY improvement, the company is still not cash-flow positive, which can strain the balance sheet and pressure the company’s strategy as partnerships will need to be developed, employees added, and possibly higher working capital demands met.
Through its transformation into a comprehensive energy solutions provider, Capstone has advanced its position in the fast-growing microgrid or distributed energy resources (DER) industry.
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