This year is expected to be a challenging one for the electric vehicle (EV) industry due to growing supply chain issues and rising production costs amid 40-year high inflation rates. Furthermore, because the Fed is set to raise interest rates this month, the borrowing costs for EV companies are expected to rise substantially, further raising the sector’s production costs.
Also, EV manufacturers are facing difficulties in sourcing sufficient semiconductors and supplies amid the global chip shortage. The bearish sentiment surrounding the electric vehicle industry is evidenced by the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 13% decline year-to-date.
Given these factors, we think it advisable to avoid fundamentally bleak electric vehicle stocks Lucid Group, Inc. (LCID), NIO Inc. (NIO), XPeng Inc. (XPEV), and Fisker Inc. (FSR).
Click here to checkout our Electric Vehicle Industry Report for 2022
Lucid Group, Inc. (LCID)
LCID in Newark, Calif., is a technology and automotive company that develops electric vehicle (EV) technologies. The company designs, engineers, builds, and markets electric vehicles, EV powertrains, and battery systems. It operates more than 20 retail studios in the U.S.
Last December, LCID was investigated by Schall Law Firm, a national shareholder rights litigation firm, on behalf of investors of LCID for alleged violations of the securities laws. This investigation focused on whether the company issued false and misleading statements or failed to disclose information relevant to investors.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, LCID's total costs and expenses increased 151.8% year-over-year to $512.08 million. Its loss from operations grew 143.2% year-over-year to $485.68 million. LCID’s adjusted EBITDA declined 54.1% year-over-year to a negative $299.58 million, and the company's net loss and comprehensive loss rose 235.9% year-over-year to $1.05 billion.
LCID is relatively overvalued compared to its peers. In terms of forward EV/Sales, LCID is currently trading at 28.42x, which is 2,151.2% higher than the 1,26x industry average. Its 8.30 forward Price/Book multiple is 188.3% higher than the 2.88x industry average. And its12.57 forward Price/ Sales ratio compares with the 1.03 industry average.
The Street expects LCID's loss per share to amount to $0.27 for its fiscal 2022 first quarter, ending March 31, 2022.
The stock declined 40.5% in price year-to-date and 7.3% over the past year. LCID closed yesterday's trading session at $22.63.
LCID's POWR Ratings are consistent with this bleak outlook. The company has an overall F rating, which translates to Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
LCID has an F grade for Value, Quality, Stability, and Sentiment. Within the F-rated Auto & Vehicle Manufacturers industry, it is ranked #63 of 69 stocks.
To see LCID's POWR Ratings for Growth, and Momentum, click here.
Click here to check out our Automotive Industry Report for 2022
NIO Inc. (NIO)
NIO designs, develops, manufactures, markets, and sells smart electric vehicles in China. It is headquartered in Shanghai, China. The company offers electric SUVs, smart electric sedans, energy and service packages, power solutions, repair, maintenance, bodywork services, courtesy car services, insurance services, and auto financing services.
On Jan.31, 2022, NIO completed its repurchase offer for its 4.5% senior convertible notes due 2024.
NIO's total operating expenses increased 94.9% year-over-year to $463.28 million in its fiscal year 2021 third quarter, ended Sept. 30, 2021. NIO’s loss from operations grew 4.9% year-over-year to $153.94 million. Its comprehensive loss attributable to ordinary shareholders of NIO and net loss per ADS came in at $440.60 million and $0.28, respectively, registering an increase of 189.7% and 85.7% from the same period last year.
NIO is trading at a premium to its peers. In terms of forward EV/Sales, NIO is currently trading at 5.56x, which is 340.5% higher than the 1.26x industry average. Its 6.10 forward Price/Sales multiple is 491.7% higher than the 1.03x industry average. And NIO's 8.41 forward Price/Book ratio compares with the 2.88 industry average.
The negative $0.16 consensus EPS estimate for its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, represents a marginal year-over-year decline from the same period in 2020.
Shares of NIO have declined 37.3% in price year-to-date and 49.4% over the past year. It closed yesterday's trading session at $19.88.
NIO's POWR Ratings reflect its poor prospects. The company has an overall F rating, which translates to Strong Sell in our proprietary rating system.
NIO has a grade of F for Stability. It has a D grade for Sentiment, Value, and Quality. It is ranked #54 of 69 stocks in the Auto & Vehicle Manufacturers industry.
To see additional POWR Ratings (Growth and Momentum) for NIO, click here.
XPeng Inc. (XPEV)
XPEV designs, develops, manufactures, markets, and sells smart electric vehicles in the People’s Republic of China. It is headquartered in Guangzhou, the People’s Republic of China. The company provides SUVs, four-door sports sedans, sales contracts, maintenance, supercharging, vehicle leasing, and ride-hailing services.
In its fiscal year 2021 third quarter, ended Sept. 30, 2021, XPEV’s total operating expenses rose 52.4% year-over-year to $434.97 million. The company’s loss from operations increased 106.7% year-over-year to $263.83 million. XPEV’s net loss increased 72.5% year-over-year to 231.58 million, while its net loss per ADS for the period amounted to $0.27.
In terms of forward EV/Sales, XPEV is currently trading at 7.13x, which is 465% higher than the 1.26x industry average. Its 9.07 forward Price/Sales multiple is 778.9% higher than the 1.03x industry average. And its 4.22 forward Price/ Book ratio compares with the 2.88 industry average.
Analysts expect XPEV's loss per share to amount to $0.28 for its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, representing a 73.4% year-over-year rise.
XPEV shares have decreased 28.6% in price over the past three months and closed yesterday's trading session at $31.26.
XPEV's POWR Ratings reflect this bleak outlook. It has an overall rating of F, which translates to a Strong Sell in our POWR Ratings system.
XPEV has an F grade for Stability. The stock has a D for Growth, Value, and Quality. It is ranked #59 of 69 stocks in the Auto & Vehicle Manufacturers industry.
Click here to see XPEV's POWR Ratings for Sentiment and Momentum.
Fisker Inc. (FSR)
FSR in Manhattan Beach, Calif., develops, manufactures, markets, leases, and sells electric vehicles. The company operates in three segments: The White Space; The Value; and The Conservative Premium. FSR is involved in the asset-light automotive business. In addition, it provides Fisker Flexible Platform Agnostic Design (FF-PAD) that allows the design and development of a vehicle to be adapted to any given EV platform in the specific segment size.
Last November, FSR and Contemporary Amperex Technology announced a long-term agreement cementing five gigawatt-hours (GWh) annual battery capacity for the Fisker Ocean SUV from 2023Y-2025Y. The gains from this collaboration are expected to take some time to realize.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, FSR’s total operating costs and expenses increased 326.3% year-over-year to $133.45 million. FSR’s adjusted loss from operations grew 326.5% year-over-year to $131.90 million. The company’s net loss and net loss per share came in at $138.43 million and $0.47, respectively, registering an increase of 58.4% and 20.5% from the same period last year.
FSR is relatively overvalued compared to its peers. In terms of forward EV/Sales, FSR is currently trading at 41.15x, which is 3,159.5% higher than the 1.26x industry average. Its 47.91 forward Price/Sales multiple is 4,545.3% higher than the 1.03x industry average. Also, FSR's 6.33 forward Price/Book ratio compares with the 2.88 industry average.
The Street expects FSR's loss per share to amount to $0.38 for its fiscal year 2022 first quarter, ending March 31, 2022.
Shares of FSR have declined 28.9% in price year-to-date and 47.5% over the past year. It closed yesterday’s trading session at $11.18.
FSR’s POWR Ratings reflect its poor prospects. The stock has an overall rating of F, which translates to Strong Sell in our proprietary rating system.
It has an F grade for Value, Quality, Sentiment, and Stability. It is ranked #65 of 69 stocks in the F-rated Auto & Vehicle Manufacturers industry.
Click here to see FSR’s POWR Ratings for Growth and Momentum.
Click here to checkout our Electric Vehicle Industry Report for 2022
LCID shares were trading at $22.46 per share on Friday morning, down $0.17 (-0.75%). Year-to-date, LCID has declined -40.97%, versus a -9.50% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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