Growth stock investors wanting to energize a portfolio may want to check out Brenmiller Energy (Nasdaq: BNRG). This innovative sub-dollar company is pioneering the thermal energy storage (TES) space, with a pipeline expected to deliver upwards of $500 million over their lifetimes. More interesting about its pipeline potential is that while it’s already considerable in size, it may be the precursor to many additional projects, considering it’s serving a TES target market estimated to be worth billions by this decade’s end.
Still, while BNRG’s future may be bright, its current progress in exploiting sector opportunities is also enviable. The company is already capitalizing on significant revenue-generating opportunities after investing over $100 million in developing technologies to ensure it stays a leader in the space. Those investment dollars have generated rewards, particularly driving BRNG’s development of game-changing TES management solutions that can significantly impact energy storage markets and delivery.
It’s also leading to deals. Brenmiller Energy’s substantial investment has resulted in a pipeline of 49 projects across 13 countries, representing potential sales, as noted, of half a billion dollars over the project lifetimes. While that current pipeline exposes a company in growth mode, Brenmiller Energy has made it known that these represent a starting point and is already eyeing additional TES market opportunities that are expected to emerge and accrue this year.
Seizing On A Massive TES Market
That’s unsurprising. Its advanced technology, including thermal energy storage solution distinctions, could allow Brenmiller Energy to transform its ambition into revenues faster than its forecasts expect. Still, taking them just at their word, having potential sales of $500 million already in its business crosshairs does expose a valuation disconnect that growth stock investors may want to seize. Brenmiller Energy shares were trading hands at $0.89 yesterday, with a market cap of just $5.33 million at that price, which, all tolled, may not be a fair reflection of value for a company with a pipeline its size. However, markets are generally imperfect, and updates on any of its pipeline projects could help cure that perceived gap between the BNRG share price, assets, and sales guidance.
It can succeed by showing the energy sector world that Brenmiller Energy’s energy storage solutions may be a leading option in a global market overtly committed to clean and sustainable energy management.
That’s not an unrealistic outcome, especially with BNRG already demonstrating comparable peer advantages related to efficiency and reliability, including Brenmiller Energy’s TES platform boasting a round-trip efficiency of 97%, which is higher than its closest competitors. Higher efficiency means that a greater proportion of stored energy can be recovered and used sustainably at a lower cost. That’s a critical factor for clients about to spend millions, even billions, on building an infrastructure to implement and manage clean energy solutions.
That’s just one competitive value driver. Brenmiller Energy operates at an elevated Technology Readiness Level (TRL) of 8, indicating a mature and well-tested technology, essential in attracting new clients and expanding existing project relationships. Another significant advantage for Brenmiller Energy and its clients is that it’s a fully vertically integrated company, meaning it can control these potentially massive projects from start to finish, a unique capability that enhances connectivity, reliability, and performance. As importantly, it can also save clients a substantial amount of investment capital by eliminating project redundancies and ensuring seamless implementation.
Collaboration With Global Brands
That’s shown through one of Brenmiller Energy’s flagship projects, a collaboration with Tempo Beverages Ltd., the sole producer and distributor of Heineken and Pepsi (NYSE: PEP) products in Israel. This project involves constructing a 32 MWh bGen™ thermal energy storage system at Tempo’s facility in Netanya. Project success could be a massive value driver moving forward, especially the part showing the competitiveness of Brenmiller Energy’s solutions compared to natural gas and stability over oil. An equally potent result is Brenmiller Energy proving its ability to deliver similar energy-generating results while significantly reducing carbon dioxide emissions.
Those wanting to see the benefits of that ability have them front and center. The success accruing from the Tempo project has paved the way for Brenmiller Energy to announce other strategic partnerships, including joining forces with environmentally conscious companies to expand its footprint in Europe, the United States, India, and Canada.
These partnerships highlight the increasing demand and interest for Brenmiller Energy’s bGen™ systems, an interest that supports a global mission to decarbonize industrial heat and explore alternative energy technologies. Other partnerships with international brands and distributors that share the same decarbonization mission contribute to placing Brenmiller Energy in some of the world’s largest markets, which it’s taking advantage of by designing and implementing projects that can deliver significant internal rates of return.
There’s more to appreciate. The company announced its innovative Heat as a Service (HaaS) model. It is also expected to be a substantial value driver by enhancing its vision for TES technology applications and accelerating access to zero-emission heat for industrial power users.
HaaS allows Brenmiller Energy to design, build, deploy, own, and operate its bGen™ thermal batteries at customer sites, taking advantage of local power market incentives. This business model delivers customers the lowest possible heat cost while generating multiple high-margin recurring revenue streams for Brenmiller Energy. It’s a win-win deal that could transform Brenmiller Energy’s 2024 and 2025 revenues.
A Value Proposition Exposed
As mentioned, totaling just the intrinsics, the company’s current $5.33 million market cap may fall appreciably short of reflecting appropriate value. And when factoring in Brenmilller Energy’s impressive achievements and in-progress potential, that gap is even more pronounced. Remember, this company has discussed the potential impact of its significant business pipeline, which they say can generate upwards of $500 million over project lifetimes. That number alone strengthens the case for BNRG to earn a higher revenue multiple.
Also, keep in mind that Brenmiller Energy is a company shifting its growth pace into a faster gear by strengthening its service infrastructure and adding more client projects to its pipeline. For a company playing a crucial role in clean and sustainable energy management solutions, Brenmiller Energy’s current valuation may be ignoring too much of the obvious—particularly the fact that this company is creating value today and tomorrow by maximizing all operating cylinders.
Thus, capitalizing on a share price roughly 91% lower than its 52-week high, despite Brenmiller Energy being better positioned for growth today, may be a value proposition too attractive to ignore.
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