William Blair: Opower At Attractive Entry Point

In a report published Friday, analysts at William Blair initiated coverage of

with an Outperform rating. The analysts believe that the decline in the company's share price since its IPO offers an attractive entry point for investors. The company is currently one of the largest providers of cloud-based software for the utilities segment. Its solutions offer improved energy efficiency, along with lower peak demand, for gas and electric utilities, using behavioral methods, such as mailing and emailing of energy efficiency reports with personalized recommendations for energy reduction. Opower also offers better customer service and satisfaction through its range of call centers, automated alerts and self service options. "In our opinion, Opower provides leading products in multiple areas of software for utilities, including energy efficiency, customer engagement, and demand response. Although there are some other competing products in these areas, we believe that Opower has a significant lead and that there are multiple barriers to entry (e.g., data, platform, and reputation with regulators and utilities) that will aid the company in maintaining its position," the analysts said. In addition, Opower has various revenue growth drivers working in its favor, which are expected to help the company to see rising revenue of about 20 percent for several years to come. The company also has the capacity to leverage its platform to innovate fresh products that could enable it to enter new markets in the longer term.