The electric vehicle (EV) industry has witnessed accelerated growth, driven by substantial demand amid high oil and gas prices and rising environmental concerns globally. The EV sales in the United States climbed to a record high of over 200,000 vehicles during the first quarter of 2022.
Furthermore, supportive federal funding and policies should boost the industry’s growth. Under the Bipartisan Infrastructure Law, the government has provided $7.5 billion to build a nationwide network of 500,000 EV chargers. According to Facts and Factors, the global electric vehicle market is expected to reach $980 billion by 2028, growing at a CAGR of 24.5%.
EV giant Tesla, Inc. (TSLA) reported solid top and bottom-line growth in its most recent quarter. However, the stock has declined 35.5% over the past six months and 35.5% year-to-date.
The company has been under immense pressure the past few months due to uncertainty caused by ongoing supply chain disruptions and suspended operations in its Shanghai manufacturing plant. Jeffrey Osborne, Cowen managing director, and senior research analyst, expects TSLA to revise its guidance lower for fiscal 2022, citing the production challenges.
Meanwhile, Wall Street analysts expect quality EV stocks Xos, Inc. (XOS) and The Lion Electric Company (LEV) to rally substantially in the near term. Thus, these stocks could be ideal additions to one’s watchlist now.
Xos, Inc. (XOS)
XOS is a mobility solutions company. It manufactures and sells battery-electric commercial vehicles. In addition, it provides a range of services to facilitate the transition of fleets to electric vehicles, including charging infrastructure, vehicle maintenance, financing, and service.
In June, XOS delivered three of its 100% battery-electric step vans to FedEx Ground Operator Cutone Transport Inc., based in Ontario, Canada. With this delivery, Cutone Transportation became XOS’ first Canada-based customer.
The total number of FedEx Ground Operators that XOS worked with accounted for seven, and XOS vehicles delivered to FedEx Ground Operators came to 24. It is expected to boost the company’s revenue streams.
On May 10, XOS launched two new commercial electric vehicles, including Xos HDXT™ and Xos MDXT™, and a fleet intelligence platform at a reveal event during the inaugural Xos Fleet Week. “We are building the fleet of the future. The new vehicle platforms go farther, last longer, and cost less for all types of fleets,” said Dakota Semler, XOS’ CEO.
“We will continue to bring innovative fleet solutions to market in an effort to provide customers with safer, more sustainable, and more cost-efficient products,” he added.
In the fiscal 2022 first quarter ended March 31, 2022, XOS’ revenues increased 786.6% year-over-year to $7.03 million. Its net other income amounted to $81,000 for the period. As of March 31, 2022, the company’s cash and cash equivalents came in at $11.81 million, while its current assets are valued at $169.39 million.
The consensus revenue estimate of $66.33 million for its fiscal year 2022 (ending December 2022) represents an increase of 1,214.1% from the previous year. The consensus EPS estimate for the current year indicates a 12.5% year-over-year rise.
XOS has plunged 39.4% over the past month to close the last trading session at $1.80. However, the 12-month median price target of $7.50 indicates a 316.7% potential upside. The price targets range from a low of $5.00 to a high of $10.00. Each of the two Wall Street analysts that rated XOS rated it Buy.
The Lion Electric Company (LEV)
Headquartered in Saint- Jérôme, Canada, LEV designs, develops, manufactures, and distributes purpose-built all-electric medium and heavy-duty urban vehicles in North America. The company’s products include battery systems, chassis, bus bodies, and truck cabins. Also, it distributes truck and bus parts and other accessories.
On April 5, LEV received an order for 50 all-electric LionC school buses from Autobus Campeau in the province of Quebec, with deliveries to begin by the first quarter of 2023. This collaboration with Autobus Campeau might boost the company’s revenues.
LEV's revenue increased 263.8% year-over-year to $22.65 million in the fiscal 2022 first quarter ended March 31, 2022. The company’s net income and earnings per share came in at $2.10 million and $0.01, up 113.1% and 106.7%, respectively, year-over-year.
In addition, its cash balance and current assets stood at $155.46 million and $343.60 million, respectively, as of March 31, 2022.
The $30.49 million consensus revenue estimate for the fiscal 2022 second quarter, ending June 2022, represents an 82.7% improvement from the same period in 2021. Analysts expect LEV’s EPS for the current quarter to increase 93.5% year-over-year.
LEV has declined 20.7% over the past month and closed the last trading session at $4.26. However, the 12-month median price target of $9.08 indicates a 113.2% potential upside. The price targets range from a low of $7.00 to a high of $13.00. Of the six Wall Street analysts that rated LEV, four rated it Buy, while two rated it Hold.
TSLA shares were trading at $688.69 per share on Tuesday afternoon, up $6.90 (+1.01%). Year-to-date, TSLA has declined -34.83%, versus a -19.85% 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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