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Electric vehicles (EVs) have been deemed the future of the auto industry, as clean energy mandates continue to push manufacturing norms away from the gas-guzzling models of past decades. With small startup companies and legacy automakers alike making serious investments in the EV space, Statista notes that revenue from electric vehicle sales is expected to reach $161.6 billion by 2028, up from $70.1 billion in 2023.
Notably, U.S. EV sales just reached a new quarterly record, up more than 49% in the July-Sept. period to 313,086. That accounts for only about 7.9% of total automotive sales in the quarter, but marks the 13th consecutive quarter of growth - indicating plenty of upside potential yet to come for the industry. Meanwhile, industry giant Tesla (TSLA) hit a record low 50% market share during the period due to heightened competition.
For investors looking to leverage this projected growth in the EV market, here's a look at three hot stocks from the industry - all trading under $10 per share - that Wall Street expects to triple or more from current price levels.
Blink Charging
We kick off our list with EV charging equipment and associated services provider, Blink Charging (BLNK). Headquartered out of Miami, Blink has over 50,000 EV charging stations across the U.S. and Canada. The company offers a variety of charging solutions, including public charging stations, fleet charging stations, and residential charging stations.
Currently commanding a market cap of $172.8 million, shares of the company are down 72.1% in 2023 so far, and now trade right around $3.00.
BLNK's latest quarterly results included record revenue of $32.8 million, up 186% from the prior year as service revenues and network fees both increased. The adjusted loss of $0.44 was better than analysts expected, and gross profit margin rose to account for 37% of revenue, up 20 percentage points from the year-ago period.
An interesting avenue of growth for the company remains its EV car-sharing business, through its subsidiary Blink Mobility. To that end, the company recently appointed industry veteran Aric Ohana as President of Blink Mobility. Ohana came from Envoy, a recent strategic acquisition of Blink's - and with the EV car-sharing business projected to reach $13 billion, Ohana is tasked to make Blink a leading player in the space.
Priced at 1.18 forward ev/sales, BLNK appears reasonably valued around current levels. Plus, forward revenue growth is set at 98.7%, which compares favorably to BLNK's five-year average of 93.2%.
Overall, analysts have assigned a “Moderate Buy” rating on the stock with a mean target price of $16.11, indicating expected upside of 437% from current levels. Out of nine analysts covering the stock, 3 have a “Strong Buy” rating and 6 have a “Hold” rating.
Beam Global
Founded in 2010, Beam Global (BEEM) is a clean energy technology company that is a leading provider of innovative sustainable technology for EV charging, outdoor media and energy security.
The company currently commands a market cap of about $99.1 million, and its shares are down 58% on a YTD basis to trade around $7.26.
Beam Global's latest quarterly results also featured a massive revenue increase, though bottom-line results fell short. Specifically, Beam reported revenues of $17.8 million in the June quarter, up 379% from the previous year to hit a new record. The loss per share of $0.32 was wider than the previous year's $0.28, and also fell short of the consensus estimate for a loss of $0.30 per share.
Like Blink, Beam has made some recent acquisitions to diversify its revenue base. After last year's acquisition of energy storage company AllCell Technologies, the company more recently signed a letter of intent to acquire Serbia-based Amiga, a specialized structures manufacturer that produces street lights, energy, and communications infrastructure. Due diligence was just completed on the Amiga transaction, which Beam expects to be accretive, and should close early this quarter.
At 1.19x ev/sales, BEEM is priced at a discount to its sector peers, and forward revenue growth of 114.6% tops the company's own five-year average.
Overall, analysts have a “Strong Buy” rating on the stock and a mean target price of $24.17. This denotes an upside potential of roughly 232% from current levels. Out of seven analysts covering the stock, 5 have a “Strong Buy” rating and 2 have a “Hold” rating.
Lithium Americas
We conclude our list with a pure-play lithium company, Lithium Americas (LAC). Considered to be one of the most critical components for EV batteries, lithium's relevance to cater to global energy needs has increased substantially.
In response to growing demand, Lithium Americas acquired the Thacker Pass lithium project, which is located in northern Nevada and is considered to be one of the largest lithium deposits (estimated at 16.1 million tonnes) in North America. After lengthy legal battles, and following a high-profile investment from General Motors (GM), construction at the site finally began earlier this year.
With a current market cap of $1.4 billion, Lithium Americas stock is trading just above $9 per share. Notably, the company recently completed a separation that created two new listings, LAC and Lithium Americas Argentina (LAAC), to more clearly divide its U.S. and non-U.S. businesses.
Looking ahead, analysts are targeting 286.7% revenue growth for LAC in fiscal 2024 to $944.9 million.
Overall, analysts have a “Strong Buy” rating for the stock, with a mean target price of $28.25. This denotes an upside potential of about 207% from current levels. Out of 14 analysts covering LAC, 11 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 2 have a “Hold” rating.
