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Penny stocks can unlock massive growth potential at a minimal price. These stocks, typically trading below $5 per share, often belong to emerging companies in high-growth industries like clean energy, or disruptive tech. Their low price allows investors to acquire large quantities of stock, creating opportunities for exponential returns if the company succeeds. However, the speculative nature of penny stocks makes them highly volatile, with risks including limited liquidity, susceptibility to market manipulation, and low transparency.
For savvy investors, targeting penny stocks with robust fundamentals or a "Strong Buy" rating can be a winning strategy. One standout in the electric vehicle (EV) space is Beam Global (BEEM), currently trading under $3 per share. BEEM stock rallied recently after China’s commitment to “moderately loose” monetary policy, as the mainland remains a key market for EVs. Against this backdrop, here's a closer look at this top-rated EV penny stock.
About BEEM Stock
Founded in 2006, Beam Global (BEEM) is a clean technology company specializing in renewable energy solutions. The firm provides solar-powered infrastructure products for EV charging, energy storage, energy security, and outdoor media. Its flagship product, the EV ARC solar-powered charging station, stands out for its rapid deployment and grid independence. Beam Global has a modest market cap of $41.8 million.
Year-to-date, shares of this EV charging company have plunged about 60.8%, significantly underperforming the broader market. Currently trading not far from its recently set 52-week low of $2.62, the stock has struggled amid a tough environment for the auto sector generally, and EVs more specifically.
BEEM Reports Mixed Q3 Results
On Nov. 14, Beam Global reported its Q3 earnings, and delivered a mixed performance. The company reported net income of $1.3 million, or $0.09 cents per share, reversing its year-ago loss and defying Wall Street's forecast for a loss of $0.16 per share. However, revenue for the period totaled just $11.5 million, which fell short of the $16.1 million consensus.
A bright spot in the report was an 80% year-over-year increase in commercial revenue, which accounted for 47% of total revenue. This diversification highlights Beam’s efforts to reduce its dependence on government contracts. GAAP gross margin reached a record 10.7%, up 9 percentage points from the same quarter last year.
Beam’s financial position remains robust. The company is debt-free, has a $100 million unused line of credit, and holds $4.9 million in cash. Its backlog of $10.6 million and strong pipeline, exceeding $200 million, underscores its growth potential.
On the conference call with analysts, CEO Desmond Wheatley noted “federal uncertainty” around EV spending, largely due to President-elect Donald Trump's rhetoric around the industry, but said, expressed confidence in returning to revenue growth by 2025.
“We're still confident that just as the pendulum is long to slow it will swing back to growth again in 2025,” said Wheatley. “In spite of what may be going on at the federal level with the new administration, there's a great deal of investment in this transition which is very unlikely to be impacted in a negative way and there will still need to be a lot of spending on infrastructure outside of U.S. Federal budgets.”
Analysts tracking BEEM expect the company to generate approximately $54 million in revenue for fiscal year 2024, reflecting a 20% decline year-over-year, while fiscal 2025 revenue is estimated to rise 31.8% to top $70 million.
Recent News About BEEM
On Dec. 10, Beam Global announced a partnership with Benzina Zero, an Australian e-mobility leader, to integrate and market each other’s products globally. The collaboration features Beam’s BeamWell desalination platform paired with Benzina Zero’s e-mopeds and scooters, enabling clean water delivery in crisis zones. Additionally, Beam will bundle Benzina’s products with its own solutions. The global e-mobility market, valued at $61.3 billion in 2023, is projected to triple by 2032, reflecting rising demand for sustainable transport solutions.
This marks another key global partnership for BEEM. On Nov. 14, Beam Global launched a strategic partnership with Globos Osiguranje, Serbia’s top insurer, to sponsor five solar-powered charging stations at Belgrade Nikola Tesla Airport.
And here at home, Beam Global just announced that its EV ARC off-grid charging platform has achieved compliance with the Build America, Buy America (BABA) Act. This designation strengthens Beam's position as a key supplier to federal, state, and local agencies, including the U.S. Army and Department of Homeland Security.
What Do Analysts Say About BEEM Stock?
The analyst community is bullish on BEEM so far. Among five analysts covering the stock, four have a “Strong Buy” rating, while one rates it as a “Hold.” The average 12-month price target of $10 suggests an impressive 259.7% upside from current levels.
The EV industry still faces challenges and uncertainties, but with the build-out of charging infrastructure a key point of concern to driving broader adoption, BEEM looks relatively well-positioned compared to some vehicle manufacturers in the space. For investors with a sufficiently high risk tolerance and a long time horizon to ride out the stock's growth phase, BEEM could be worth considering around current prices.
