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They say that politics are downstream from culture – but so are the stock markets. And sometimes, culture informs our investment decisions in ways that we could never have predicted just a decade earlier. The electric vehicle sector is one such sector, in the early stages of its takeoff.
EVs are more than just the flagship of an environmentalist’s wish list. They are the showboats of new automotive technology, promising several advantages over internal combustion technology: cleaner vehicles, higher performance, and a revolution in battery technology that will certainly carry over into the broader economy.
With all of that behind it, it’s no wonder that 5-star analyst Tate Sullivan, of Maxim Group, sees current conditions offering an opportunity to buy into EV stocks. He notes that EV companies in his coverage universe have been executing well on consistent expansion strategies, building up both production capacity and distribution networks.
Sullivan is especially bullish on two EV stocks, noting that each could climb over 100% higher in the year ahead. Using TipRanks’ database, we did a deep dive into the data to find out what makes both so attractive.
Beam Global (BEEM)
First up of Sullivan’s picks is Beam Global, a solar tech company that focuses on creating charging solution for electric vehicles and drones. Beam’s flagship product is the EV ARC (electric vehicle autonomous renewable charger), a solar powered, stand alone charging station that fits into standard parking spaces and is compatible with most models of electric vehicle. The EV ARC operates off the grid, increasing its installation flexibility – and its reliability.
Beam boasts that the EV ARC can be installed without construction permits in just a few minutes, an advantage conferred directly by its independent, off-the-grid design. Additionally, the charging units can be easily moved should the customer need to relocate. These attributes make the system attractive to fleet customers, and Beam lists over two dozen California municipalities and State government agencies on its customer list.
Earlier this year, Beam announced that it saw record deliveries in 4Q20, with 33 EV ARC systems delivered and installed during the quarter. This was more than any previous Q4, and more than the three previous quarters of 2020.
Looking at Beam, Sullivan believes that the company’s success in delivering is sustainable, noting, "BEEM can support larger orders from its current manufacturing facility by adding workers and shifts.”
The analyst added, “We continue to expect BEEM shares will anticipate large orders for the company's primary clean energy EV charging infrastructure product, the EV ARC. While many other companies in the EV market are developing products, factories, and supply chains, BEEM already has revenue, repeat customers, and a plan to significantly increase capacity.”
In line with his optimistic approach, Sullivan rates BEEM a Buy along with a $90 price target. This figure implies a 124% upside from current levels. (To watch Sullivan’s track record, click here)
Looking at the consensus breakdown, 2 Buys and 1 Hold have been issued in the last three months. Therefore, BEEM gets a Moderate Buy consensus rating. Based on the $69.33 average price target, shares could surge ~72% in the next year. (See BEEN stock analysis on TipRanks)
GreenPower Motor (GP)
From innovations in charging infrastructure, we’ll switch over to actual EVs. GreenPower Motor is a maker of commercial electric vehicles, with a line of busses marketed to school districts and urban mass transit systems, as well as cargo vans fit for light hauling duties. The company’s prime product is the EV Star, an adaptable electric drive cab and chassis capable of modification into truck, van, or bus configurations. GreenPower also builds and markets full size, low-ride transit busses of more conventional design.
GreenPower is based in Vancouver, Canada, and boasts a strong customer base in the state of California. The California state government has directed that, by 2035, all new vehicles sold in the state must be zero-emission; this opens up a large market for companies like GreenPower, and the company currently boasts Sacramento Regional Transit, the Port of Oakland, and the University of California system among its customers.
Sullivan points out that “GP has already announced plans to increase monthly production of electric school buses and shuttle vans ahead of larger orders,” and to expand its manufacturing facilities. The company reported having 95 vehicles ‘completed but not delivered’ or in production at the end of Q4, and is seeing increased customer orders.
Recent new customers include Zeem Solutions, an e-mobility logistics company that ordered 30 EV Star vans, and Washington State’s Grant Transit Authority, which ordered four wireless-charging EV Stars. In February, GP announced an agreement to provide up to 150 EV Star cab and chassis units to Forest River, Inc., a maker of cutaway bus, motorhomes, and trucks.
Referring to the Forest River agreement, Sullivan wrote, “We believe this order will help GP secure orders from other EV customers. In addition to announcing this order, GP believes its current monthly production of EV Star and electric school buses can lead to $75M of annual revenue.”
To this end, the Maxim analyst rates the stock a Buy, and his $45 price target indicates room for 125% growth in the next 12 months.
Judging by the consensus breakdown, opinions are anything but mixed. With 3 Buys and no Holds or Sells assigned in the last three months, the word on the Street is that GP is a Strong Buy. At $41, the average price target implies 116% upside potential. (See GP stock analysis on TipRanks)
To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.