Bring EVs or EVs, and you’re sure to hear a wide range of opinions. One thing is clear: the market for electric vehicles is booming. Tailwinds include both political and social pressures, but the industry itself is also driving the expansion. New models are coming out, battery technology – and vehicle range – are improving, and charging networks are developing and becoming more efficient.
Every major economic and technological development opens up investment opportunities, and electric vehicle stocks are no exception. With the electric vehicle market expected to reach more than 17 million units sold per year by 2028, this is a wide open area for risk-conscious investors. The choices aren’t limited to automaker inventory; investors can also buy charging network providers, battery manufacturers and technology companies. They all have their hands in the EV pot.
One analyst, Canaccord Genuity’s George Gianarikas, is particularly impressed with the potential inherent in the EV industry, and his recent picks include two EV-related stocks he sees gaining 60% or more in the coming months. Do other analysts agree with Gianarikas? We used the TipRanks database to find out. Let’s take a closer look.
Rivian Automotive (RIVN)
We’ll start with Rivian Automotive, an electric car manufacturer that has taken an innovative approach to vehicle design. Rivian developed a “skateboard” platform, a wheeled chassis powered by four electric motors – one at each wheel. This versatile chassis incorporates pre-installed fittings for various battery systems and can adapt to different body styles and functions. As a result, it is a modular electric vehicle that offers maximum flexibility and can easily adapt to a range of vehicle types. Rivian’s platform is designed from the ground up to provide maximum flexibility.
We should note several issues that have worried investors about Rivian’s performance as an automaker. The company has yet to make a profit and has a reputation for burning money. However, there are indications that this may soon change. In the fourth quarter of last year, the company announced record production and delivery figures – 10,020 battery electric vehicles rolling off the production line and more than 8,000 delivered to customers. These figures mark a significant increase from 1,003 produced and 909 delivered in the fourth quarter of the previous year. While production and delivery figures for the first quarter of this year were slightly lower, with 9,395 vehicles built and 7,946 delivered, they are still showing a strong performance.
The year-over-year production increase reflects the ramp-up of operations at the company’s Normal plant in Illinois. This ramp-up led to an increase in production in 2Q23, with Rivian reporting 13,992 vehicles produced in Q2 and 12,640 delivered. In its production update, Rivian reiterated its goal of reaching annual production of 50,000 vehicles.
The company will release its 2Q23 financial results on August 8, but we can look back to the first quarter to see where Rivian stands. The company reported revenue of $661 million, missing expectations of $9.2 million. On a positive note, the company’s net loss, a non-GAAP EPS of $1.25, was 34 cents higher than expected and showed a 12.5% year-over-year improvement.
In Gianarikas’ view, the increase in production numbers bodes well for Rivian, showing that the business is maturing. The analyst clearly states his opinion, explaining why he thinks Rivian will continue to outperform expectations: “The road to recovery continues. 2Q23 production/shipments surprised on the upside. Rivian’s team has taken an operational turn as the company escapes its post-IPO operational quagmire. We expect a continued message of stabilization and optimism as Rivian releases its full earnings – as supply chain and operational bottlenecks ease and the R2 prepares for its early unveiling. next year.
“We continue to believe that Rivian is on track to capture its fair share of the electric vehicle market over time through a solid and thorough vertical integration strategy that should lead to a desirable customer experience and strong profitability over time. time,” Gianarikas added.
Gianarikas continues to price RIVN stock as a buy, and his price target of $40 implies the stock will gain around 63% over the next 12 months. (To see Gianarikas’s prize list, Click here)
Overall, Rivian holds an analyst consensus moderate buy rating, based on 16 analyst ratings which include 10 buy, 5 hold and 1 sell. However, the sale price of $24.73 and the average price target of $23.50 combine to suggest a modest decline of around 5% year over year. It will be interesting to see if analysts update their models or change their RIVN ratings soon. (See RIVN Stock Forecast)
Wallbox SA (WBX)
The next step is Wallbox, the Spanish company that is establishing itself in the electric vehicle charging niche. This is a niche with high growth potential, as the rapid expansion of electric vehicle adoption promoted – and sometimes mandated – by governments at national and local levels cannot be accomplished without simultaneously expanding the network of recharge. Wallbox, which has developed lines of ports and charging stations for commercial and residential use, is compatible with most brands of electric vehicles, including industry leaders like Tesla and BYD.
In addition to charging your electric vehicle, Wallbox has integrated value-added capabilities into the product lines. The company offers chargers that can adapt to both Type 1 and Type 2 vehicle charge ports and have two-way operability, allowing users to discharge a fully-powered electric vehicle around the home for immediate battery use. energy, or even on the local power grid.
All of this gave Wallbox a certain cachet in the industry and led to increased revenue for the company. Wallbox recorded revenue of €35.1 million in 1Q23, up 24% year-on-year. In dollars, revenues were converted to US$38.6 million; this figure missed the forecast by US$2.8 million. The company’s gross margins were 36.8%, up 90 basis points, or 0.9%, from the prior quarter, and effective cost-cutting measures saved Wallbox more than 10 million euros compared to 4Q22 expenses. Also during the first quarter, Wallbox entered the Japanese electric vehicle charging market, opening an important path to expand its business.
Since the publication of the first quarter results, Wallbox has made two major announcements that are of particular interest to investors. The first is the release in June of an agreement with the big box warehouse chain Costco. The deal makes Wallbox’s best-selling EV charger, the Pulsar Plus, available at Costco stores across the United States, starting this month.
The second was the July 6 announcement that the company had hit a major sales milestone for its Supernova DC fast chargers. Wallbox has achieved 1,000 sales of the product, an industry leader in quality, to over 80 customers in 30 countries. The Supernova DC fast charger was introduced last year.
All of this, but especially the company’s rapidly growing network of partnerships, has caught the eye of analyst George Gianarikas, who sees Wallbox poised for further expansion. He writes of Wallbox’s outlook: “Through its merchant status and focus on technology, Wallbox has, to date, built a strong ecosystem in the United States – with companies like Uber, Lyft, Fisker, Nissan and now Costco. We expect this trend to continue. Longtime Wallbox shareholders should be rewarded. Yes, the current data points for overall electric vehicle sales (ex-Tesla) remain tepid and the National Electric Vehicle Infrastructure (NEVI) program has been slow to unfold. However, 2024 could present an inflection in demand, particularly in commercial/DC charging. »
“The company’s vertical integration strategy should continue to produce a higher quality and technically superior product portfolio. This focus on quality should also result in above-market growth rates for Wallbox, as domestic and public market reliability requirements impact its rivals’ ability to compete,” added L. ‘analyst.
Consistent with this position, Gianarikas gives WBX a Buy rating, and his $10 price target implies a potential gain of around 149% on the one-year horizon.
Wallbox attracted the bulls, as shown by the unanimous Strong Buy consensus rating, based on 5 recent positive stock ratings. The stock trades at $4 per share and its average price target of 8.20 indicates room for growth of around 104% over the coming year. (See WBX Stock Forecast)
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Disclaimer: The views expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.