Water Tower Research is initiating coverage on DC power company Polar Power Inc (NASDAQ:POLA), citing booming demand for DC power systems as a key growth driver.
Polar Power is focused primarily on providing clean and efficient DC power systems for backup, primary, and mobile power needs and currently supplies DC power systems for a variety markets including 5G telecom, electric vehicle (EV) charging, and nano/microgrid systems for homes and business.
The DC power market is expected to reach $5.5 billion by 2025 from $4.2 billion in 2019, Water Tower analyst Shawn Severson noted in a January 29, 2021 write-up. The global telecom power systems market is expected to grow at a CAGR of 9.7% between 2020 and 2027, Severson added.
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The analyst noted that Polar plans to leverage its DC technology to address EV charging. “EV charging infrastructure could become a bottleneck for EVs, and the industry is looking for solutions,” Severson wrote. “Polar has an opportunity to leverage this market. Over the next 12 months, the company could see key inflection points in this market. Its DC power systems are very well-suited for stationary and portable charging solutions for EVs.”
According to Water Tower Research, the rapidly-growing demand for EV charging is likely to strain the utility grid and can be supplemented by cost effective, clean, and efficient solutions by Polar’s DC power systems in both stationary and mobile charging applications.
Another key driver is demand for microgrids, which is on the rise as both public and private sector entities are establishing microgrids to provide alternatives to traditional utility assets.
“As the company expands its product line, it anticipates seeing expanded opportunities for onsite power solutions up to 200kW,” Severson wrote. “The company’s DC power platform integrates seamlessly with existing renewable and battery components. Polar plans to actively pursue this market in sub-200kW applications where its DC power platform offers several advantages over incumbent AC power solutions.”
Water Tower Research noted that Polar must “continue to effectively compete” with larger companies in the telecom backup power market.
Shares of Polar Power were trading at $18.32 after market close on Monday.
Contact Angela at angela@proactiveinvestors.com
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