Everyone knows that electric vehicles (EVs) are the future and Tesla leading the way is already a world-renowned brand.
While the early businesses that had the opportunity have done well thanks to supporting Tesla, the sector offers many other opportunities for investors, especially now when government policies are tilted more. towards EVs.
Recent times have seen the passage of the Inflation Reduction Act (IRA), which includes initiatives and tax credits to help accelerate EV adoption, while the Dual Infrastructure Act party includes an EPA program that provides discounts to school districts, bus operators and contractors to replace existing school buses with a clean and zero-emissions (ZE) model.
So let’s put Tesla aside and check out other less obvious opportunities in the space. We withdrew from TipRanks database two electric vehicle manufacturers are benefiting from these new policies and also have the backing of Street experts; both are rated as Strong Buy by analyst consensus and offer ample upside potential from here.
Lion Electronics Co (LEV)
We’ll start with Lion Electric, a Canadian manufacturer of all-electric heavy and midsize vehicles. The company’s current product line boasts seven models of mid-range vans and buses including all-electric class 6 and 8 commercial urban vans (LION 6 and LION 8), minibuses/vans electric midsize buses LionM and LionC, all – Class C electric buses.
The company is aiming to ramp up capacity dramatically with a new 900,000-square-foot production facility in Joliet, where it is expected to begin production later this year. This is in response to an ever-expanding order book for its electric buses and trucks.
Services have seen decent growth, although still on a small scale. In Q2 22, the company delivered a record 105 units, including 90 EV school buses (EVSBs) and 15 commercial electric vans, up from 72 EVSBs and 12 trucks delivered in Q1 and 48 EVSBs and 13 trucks were delivered in the same period. A year ago.
Revenue brought in the highest revenue of $29.5 million, up 76.8% year over year. In terms of profits, the company sees adjusted EBITDA as negative $14.4 million, resulting in Adjusted. EPS – $0.07. LEV’s $575 million vehicle order book currently includes 2,357 vehicles.
As noted by Roth Capital’s, the company will benefit from aggressive policies in both Canada and the US. Craig Irwin.
“The recently launched Canadian iMHZEV program for zero-emissions heavy and medium-duty trucks and the US$5 billion in federal funding for EV School Buses are key pieces of support for what we do. I expect to become a vibrant HD EV market by 2023,” the analyst said. “We see the release of US EV Bus offers starting this fall as an important catalyst for stocks… Canada’s programs along with the $5 billion Clean School Bus program US EPA dollars will support faster deliveries.”
Citing a “clear lead in the EV School Bus space,” Irwin rates LEV shares a Buy while his $13 price target suggests they are undervalued by a huge 437%. . (To see Irwin’s achievements, click here)
Almost all of Irwin’s peers agree that this is a stock to support; LEV selected 7 analyst ratings in recent months, with 6 Buys and 1 Holds with a Strong Buy consensus rating. The stock’s $8.14 average price target suggests it is up 236% from its current trading price of $2.42. (View LEV stock forecast on TipRanks)
GreenPower Motor Company (GP)
Now let’s check with another Canadian electric vehicle manufacturer, GreenPower Motor. GP’s product line includes services for passenger transport (EV Star and EV Star Plus), freight (EV Star Cargo and EV Star Cargo Plus), student transport (electric school bus) school BEAST (Battery Electric Vehicle School Automotive Transport) and its younger sibling the Nano BEAST, introduced by the company as a Class A school bus. Built for the sole purpose on the market This vehicle was recently awarded the Transportation News Innovation Award for Best Green Bus Technology.
The lineup may be deep and varied, but it’s still early days of sales. The company generated revenue of $3.85 million in its first quarter (Q6) financial report. This was up 44.8% year-over-year, although it was $2 million lower than the consensus estimate. While gross margins of 28% are lower than the 33% reported a year ago, they represent consecutive increases from 12.5% in the previous quarter. All told, the company reported a net loss of $4.35 million for the quarter.
Despite missing expectations, analyst B. Riley Christopher Southerner that patient investors will eventually be rewarded.
“GreenPower appears to be on the cusp of the incremental revenue shift we’ve been waiting for, although the timing may not be as soon as we anticipate,” the analyst said. “We believe visibility will improve significantly thanks to the FY2Q22 call in November, particularly given the recent policy initiatives in the US and Canada. We expect GreenPower to benefit from the provisions of the Inflation Reduction Act, the EPA’s new Clean School Bus Program in the US and recent support in Canada. “
Based on all of the above, it’s not uncommon for Souther to reiterate his Buy rating on GP stock. At $6, the analyst believes the stock could rise 212% over the next 12 months. (To see Souther’s achievements, click here)
Souther’s expectations seem relatively mild compared with those of some colleagues; The average price target is currently at $11.75, making room for a one-year return of 493%. Overall, all 4 analyst ratings on file are positive, giving the stock a Strong Buy consensus rating. (See GP Motor supply forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important to do your own analysis before making any investments.
