Polar Power: A 5G Play

Jul. 29, 2019 7:20 AM ETPolar Power, Inc. (POLA) StockPOLA10 Comments

Summary

  • It hardly gets better than this.
  • The stock is enormously undervalued.
  • 5G could be the catalyst that the stock needs to surge.

Polar Power (NASDAQ:POLA) is expected to deliver spectacular revenue growth during 2019, and the market estimates it will be growing incredibly well in the following years.

Investing in the company presents a secure risk-reward proposition with quaint downside and huge upside potential, and as for its price, it is absurdly undervalued.

Polar Power is a micro-cap company with a market cap of about $46 Million with favorable financials. The company produces direct current solutions, which have been trending due to the telecommunications revolution and renewable energy growth, among others.

Drivers

As a rule of thumb, the more cell towers a carrier have in a zone, the more reliable communications are. 5G speed is designed to provide high-speed internet to cellphones and to reduce the distance of the cell tower to the user helps to give better speed and higher reliability.

A significant amount of Polar Power's revenue comes from installing energy backups to the cell towers. The more cell towers there are, the more will Polar power grow.

The second driver which is more on the Verizon is 5G. This will also be a backup power but with larger sized DC generators and the 15 to 25 kilowatt range. Our momentum in the Tier one continued from fourth quarter as evidenced by our high backlog. I'm optimistic that this segment will see more sustained strength of 2019 based on current forecast. Most last mile providers are small private firms with owner operators managing the telecom infrastructure.

These providers also sublet their infrastructure to various other providers for improving site efficiency. Due to off grid and back grid nature of these installations I believe we bring a higher value proposition to the customer with our DC solar hybrid power system.

- Arthur Sams CEO Q1 Earnings call

The DC solar

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Analyst’s Disclosure: I am/we are long POLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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