Let’s talk about electric vehicles, EVs. Electric cars are not a new concept – they have been around since the first automobiles. But over the past decade, several factors have combined to make them more competitive with the industry-standard internal combustion engine. Chief among these factors are improvements in battery technology, reductions in weight and improvements in power and range, and cost reductions as manufacturers scale up production. Globally, EV makers in 2010 They are on track to spend more than $515 billion by 2030, expanding production and marketing and introducing new EV models.
The expansion of the EV market was supported by a combination of government subsidies and social pressure, and the results were strong. In the year By 2022, EVs’ market share was 14 percent globally, more than tripling from 2020. Putting this into unit numbers, EV sales reached 10.5 million last year, and are expected to reach 27 million by 2026. Powerful investment opportunities for the journey.
We used this with this in mind TipRanks database To suggest two EV shares They’ve received strong buy ratings from Wall Street professionals and at least one could see an increase of up to 100% over the next year. Let’s dive in.
Lee Auto, Inc. (L.I)
We’ll start with Li Auto, the leader in China’s EV market. Lee was founded in 2015, and started full production in 2019. Currently, the company has several EV models on the market. These include the L9, a six-seater family SUV, the L8, a six-seater premium model SUV and the L7, a five-seater SUV. The company’s vehicles are targeted at the family demographic and as of last August, the company has delivered a total of 208,165 vehicles by 2023.
A look at Lee’s latest production update shows that the company had a banner month in August – shipments of each L-series vehicle topped 10,000, and the company’s August deliveries totaled 34,914. Sales and deliveries of the L9 have been particularly exciting for Li, as the model remains a top seller in the category and has seen more than 100,000 deliveries since its introduction in August last year.
Strong deliverables are underscoring Li’s strong financial results. The last quarter reported was 2Q23, which ended before the August filing report, but the results suggest that Lee is delivering on the financial end. In Q2, the company’s revenue came in at $3.95 billion, beating forecasts of $3.8 billion — and up an impressive 228% year-over-year. Bottom-line EPS took a more dramatic hit, coming in at 36 cents a share, or triple Wall Street expectations of $0.12.
Lee Auto is covered by Nomura analyst Joe Ying, who is impressed by the automaker’s ability to generate sales. The company is forecast to see further gains in revenue, and in a recent note, “we expect Lee Auto to continue to experience strong y growth in 2023. We believe it is key for all players in China’s EV market to help them gain share. We forecast Lee Auto to deliver a 72% CAGR for auto shipping with 68% revenue CAGR in 22-25F. They encourage long-term business growth.
With these interesting comments, Ying rates Li a Buy. The price target set at $54 indicates a potential upside of 41% over the next year. (To see Ying’s record, Click here)
Lee Auto’s one-vote positive consensus rating of strong buy based on 9 positive analyst reviews indicates that Ying’s bullish view is not out of place. The stock’s average price target of $51.81 represents a 22% increase from its current trading price of $38.4. (look out LI stock forecast)
ChargePoint Holdings (CHPT)
Next, ChargePoint Holdings isn’t an EV maker — but it’s an EV-related stock, just the kind of company created to directly benefit from the rapid expansion of the EV market. ChargePoint, as the name suggests, builds and installs the charging infrastructure that EVs rely on. The company offers a wide range of charging stations to meet the needs of businesses, car fleet providers and private vehicle owners.
In the year Since its launch in 2007, ChargePoint has become the leader in the charging station market, and has built an estimated 70% market share, at least 7x more than its nearest competition. Across the North American and European markets, ChargePoint has more than 240,000 sites on its network, and its enterprise customers include 76 percent of Fortune 500 companies. The company is strongly positioned to see further gains as the EV charging space expands in the coming years. The EV charging station business is expected to reach $60 billion by 2030, and an impressive $192 billion by 2040.
That said, the stock took a big hit for the second quarter of fiscal 2024 after its recent earnings report missed expectations. million, missing the consensus estimate by $2.34 million. Likewise, EPS of -$0.35 came in below analysts’ estimates by $0.14.
His attitude did not improve matters. FQ3 revenue is expected to be between $150 million and $165 million, with annual revenue guidance of $605 million to $630 million. Wall Street is looking for revenue of $182 million for the year and $678 million for the quarter.
However, JP Morgan analyst Bill Peterson is keeping the faith, and has an explanation for the disappointing reading.
“We believe the recent financial results are largely being influenced by unfavorable market trends rather than company-specific issues,” Peterson said. “For example, we don’t believe ChargePoint is losing market share (and may even be outperforming the market). We also see a strong win rate for ChargePoint (and its partners/customers) with NEVI (National Electric Vehicle Infrastructure) projects, albeit in the early stages. The setup next year With margin headwinds further diminishing and continued strong passenger EV sales growth expected, we think commercial vehicle growth is very good.
“Thus, as utilization trends pick up (in some cases to unsustainable levels in the business segment) and fleets become meaningfully visible, we see the possibility of revenue growth accelerating in CY24 relative to CY23 levels,” the analyst continued.
Looking ahead, Peterson has an Overweight (Buy) rating on CHPT shares, with a $10 price target that suggests a 75% gain over the one-year timeframe. (To see Peterson’s story, Click here)
Overall, the Charge Point’s street view is just as bullish. The stock maintains a strong buy consensus rating based on 10 positive buy ratings, with an average price target of $11.43 suggesting a 100% gain in the stock over the next 12 months. (look out CHPT stock forecast)
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Disclaimer: The opinions expressed in this article are those of the featured analysts only. The content is intended for informational purposes only. It is very important to do your own analysis before making any investment.
