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Outside of industry leader Tesla (TSLA), it's been a tough year for electric vehicle (EV) stocks. Rising competition and softer consumer demand have presented stiff challenges for EV start-ups, and an ongoing price war has pressured margins across the industry.
Heading into 2024, though, a more supportive macroeconomic backdrop - highlighted by cooling inflation and expected Fed rate cuts - could give beaten-down EV names some much-needed relief. Here's a closer look at one low-priced EV stock that analysts expect to surge over the next 12 months.
BEEM Stock Lags as Financials Impress
Beam Global (BEEM), based out of sunny San Diego, is focused on crafting infrastructure to support EVs and clean energy. Their EV ARC solar-powered charging stations are a game-changer, offering a way to juice up your ride that's faster, more wallet-friendly, and greener than the usual grid-tied options. Plus, they've got battery storage solutions that let you stash away that solar energy or grid power for later. BEEM's big goal? To make clean energy as easy to get your hands on as a cup of coffee.
Like many other EV stocks, BEEM has taken it on the chin in 2023. The shares are down more than 57% year-to-date, and have been lingering below $10 since August.
While the share price performance is dismal, BEEM's financial performance isn't quite as bleak. In Q3 2023, they pulled in $16.5 million in revenue, a whopping 149% increase from the same time in 2022. Revenue growth fell just short of consensus estimates, but the reported loss of $0.26 per share was narrower than expected.
For the full fiscal year 2023, Wall Street is expecting a per-share loss of $1.18 - which is expected to narrow considerably in fiscal 2024 to $0.26 per share. Revenue is expected to rise 34.7% in fiscal 2024 to $88.39 million. That means BEEM is currently valued at just 1.08x 2024 sales, and its price/book ratio of 1.86 is also below the sector median.
Notably, BEEM's market cap is right around $95.5 million, which is lower than its enterprise value of $93.8 million. Plus, the company is debt-free, while the cash balance increased to $14.8 million as of Sept. 30, compared to $1.7 million at year-end 2022.
BEEM’s Competitive Advantages and Growth Opportunities
Beam's competitive edge lies with its unique lineup of products, which have resonated with customers who want to cut their carbon footprint, save on energy costs, and boost their grid reliability. Plus, the company has a strategic presence in key markets like California, Europe, and Canada through partnerships and acquisitions.
This has helped BEEM secure repeat orders from federal agencies, including the Department of Defense, the Department of Energy, the Department of Homeland Security, the Department of Transportation, and the General Services Administration. These orders show that BEEM's existing federal customers trust them and are satisfied with their products.
And let's not forget about BEEM's expansion in the European market, one of the most advanced and lucrative markets in the EV industry. They've acquired Amiga, a leading provider of renewable energy and battery storage solutions for the telecommunications sector, and formed Beam Europe, a subsidiary focusing on the European market. The newly combined company has already landed orders worth $750,000 from a leading European telecom operator since the formation of Beam Europe, pointing to strong demand and potential for BEEM’s products in the European market.
BEEM has also been granted a new patent by the European Patent Office that covers EV Standard™, their renewably energized streetlight replacement products that provide curbside EV charging. These products replace existing streetlights with solar-powered LED lights that can also charge electric vehicles at the curb, allowing cities and municipalities to cut their energy consumption, carbon emissions, and maintenance costs while also boosting their EV infrastructure and accessibility.
As of Sept. 30, the company had a backlog of $31 million, along with a pipeline exceeding $112 million.
How High Can BEEM Stock Rise in 2024?
Based on current levels, BEEM looks like a bargain compared to the mean analyst target price of $21.17. That's a potential upside of 199% — suggesting analysts think the stock has potential to roughly triple over the next 12 months. The high target price is a whopping $40.00, more than five times the current share price, and even the low target of $9.00 implies potential upside of 27%.
Out of the 7 analysts covering BEEM, 5 are yelling "strong buy," and 2 are going with a “hold." The consensus is clear: analysts are bullish on BEEM's prospects heading into 2024.
In a nutshell, Beam Global could be a hidden gem in the EV industry. With a solid competitive edge, clean balance sheet, substantial growth potential, and a stock price that looks like a relative bargain, it's a prime opportunity for investors looking to gain exposure to the space. If BEEM's stock price catches up to its promising fundamentals, investors could see some serious gains in the year ahead.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
