U.S. auto sales for the first quarter (Q1) were up 5%, but EV market growth continues to decelerate. High interest rates have aggravated the situation, dampening consumer demand and weighing down EV charging stocks.
Nevertheless, U.S. and international legislation continues to support the EV industry and the rollout of comprehensive charging networks. Though it may seem like a tall order for the EV market to rebound, its long-term growth trajectory suggests that it’s only a matter of time. Hence, the EV sector is positioned for an emphatic comeback with multiple secular tailwinds. That said, hunting for stocks that can potentially bridge the existing infrastructure gap while offering a gateway to sustainable returns is important. Here are three EV charging stocks that fit the bill.
EV Charging Stocks: Nio (NIO)
Chinese EV titan Nio (NYSE:NIO) gets a lot of bad rep, but at under $5, it’s a steal. NIO stock has tanked over 50% year-to-date, roughly 93% below its all-time high of $62.84. It now trades at just 0.96 times forward sales, with analysts expecting a massive 60% from current prices.
To be fair, Nio’s recent quarterly performances have been far from encouraging. Its business continues to suffer due to weak demand and fierce competition in China. Consequently, it had to slash its Q1 delivery estimates to roughly 30,000 vehicles, down 9% from the initial high-end of its forecast.
Nevertheless, Nio remains attractive over the long term due to a likely rebound in the EV market, improving gross margins, and strong partnerships. The whopping $2.2 billion infusion from CYVN Holdings it recently received highlights its robust potential for recovery.
Furthermore, its EV charging business adds a unique dynamic to its business. Though its primary business navigates challenges, its EV charging segment is thriving. It plans to significantly expand its charging infrastructure this year by adding 1,000 battery swap stations and 20,000 charging piles. Moreover, it plans to deploy its new Power Charger 4.0 and PowerSwap Station 4.0 in April, which includes over 1,000 additional Power Swap Stations and 20,000 chargers to its already extensive network.
Blink Charging (BLNK)
Blink Charging (NASDAQ:BLNK) is a bellwether in the EV charging space, and it has exhibited tremendous growth over the past several years. Its 5-year revenue growth stands at 127%, roughly in line with its year-over-year (YOY) figures. Though growth rates are expected to normalize, analysts still expect forward sales to be at an impressive 55%.
Its latest earnings report was a visual feast, with sales rising 88.9% year-over-year (YOY) to $42.7 million, beating market expectations by $8.65 million. This incredible performance is underpinned by a healthy 12% and 40% jump in product and service sales for the quarter, respectively. Also, the deployment of more than 23,347 charging stations last year indicates its aggressive growth strategy and commitment to leading the charge in EV infrastructure.
Financially, Blink Charging has fortified its positioning by effectively managing its asset base and raising a spectacular $113 million in gross proceeds. Moreover, all eyes are on December, when it is expected to post its first positive EBITDA.
Beam Global (BEEM)
Beam Global (NASDAQ:BEEM) is another E.V. charging upstart that’s been expanding briskly with new agreements. In the past five consecutive quarters, its revenues have grown by triple-digit margins, taking its trailing twelve-month (TTM) revenue base to $55.2 million. To put things in perspective, its 2015 sales were a mere $2.6 million.
Furthermore, BEEM’s transformative wireless charging technology recently got an award in the form of a patent from the U.S. Patent Office. According to its CEO Desmond Wheatley, it enhances its cutting-edge charging solution in EV ARC, enabling easy vehicle charging simply by parking on the device.
Furthermore, the company’s been inking multi-million dollar deals spanning both government and military sectors, involving contracts with Homeland Security, the U.S. Army, San Diego and Los Angeles city governments, and the U.K. Ministry of Defense. Hence, with such an impressive lineup of clients, ignoring BEEM stock is tough.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
