Since taking it on the chin with a very weak third quarter, POLA stock has been clawing its way back up. This move makes sense as the company, despite a weak quarter and what appears to be limited visibility based on their historical comments regarding guidance, is well positioned for excellent growth over the next couple years.
Dealing with large companies like Verizon and AT&T can be challenging for a small company. You are truly the tail being wagged by the dog and business can come and go at times that are truly beyond your control.
However, when you offer a product that is best in class for your industry, like Polar’s DC generators for cell-tower backup power, eventually the business will come. Timing might be beyond your control, but the opportunity is real and the sales eventually come through.
This is certainly the case with POLA as they enter what appears to be a period of extended growth. On their last quarterly call, management went so far as to say, “this is the most confident we have ever been.” There is a reason for this confidence as, while history may make them reluctant to vocalize this in guidance, business is picking up for Polar Power.
On top of the many RFPs that Polar is responding to, both domestically with their Tier 1 clients and internationally, it appears that a new tranche of business may have arrived sooner than expected. While there is no confirmation of this, a major initiative between Verizon and AT&T may be bringing business to POLA in the very near future.
A news release came out this week that was titled “AT&T, Verizon and Tillman Infrastructure announce collaboration to build hundreds of cell towers“. This is a very big announcement in that both cell companies are Polar customers and, working together, they should be willing to pay for the best in class solution, which is certainly POLA. As such, I expect that Polar could win a significant piece of business from this collaboration and, if so, we should be hearing about it in the near future.
To be honest, POLA has been a disappointment since their IPO last year. The stock is down and they have missed forecasts dramatically, due to their business with Verizon slowing. They are now, however, positioned to see business from AT&T, Verizon and T-Mobile in the US. And, they have a large list of potential international clients, to whom they are submitting RFPs.
To date, things haven’t worked out well for POLA investors. However, those with the patience to hold through the tough times are going to be well positioned when business picks up. It appears that could be happening very soon.
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