Whether you like electric vehicles or not, it’s hard to deny that we are seeing more and more of them on the road. Even manufacturers known for producing V8s in the old days are now electrifying their fleet.
The reason is not just consumer preference. Regulations also play a critical role.
California, for instance, is expected to approve a plan to end sales of gasoline-powered vehicles over the next 13 years. The plan will set interim targets to phase out new gasoline cars and completely ban the sale of them by 2035.
Daniel Sperling, a board member of the California Air Resources Board, tells CNN that the measure is “monumental.”
Meanwhile, California governor Gavin Newsom called the plan “one of the most significant steps to the elimination of the tailpipe as we know it.”
Other states typically follow California’s lead when it comes to implementing auto emission regulations.
For traditional automakers, it isn’t good news. For EV stocks, on the other hand, it could serve as a powerful catalyst.
ChargePoint Holdings (CHPT)
ChargePoint Holdings is solidly positioned for the EV boom.
The company has one of the largest EV charging networks in the world. It has around 5,000 commercial and fleet customers, including 78% of Fortune 50 companies. Since its inception, ChargePoint has delivered more than 123 million charging sessions.
Of course, EV stocks haven’t been market darlings this year and this EV infrastructure play was caught in the sell-off as well. ChargePoint shares have fallen 31% over the last 12 months.
That could give bargain hunters something to think about.
In the fiscal quarter ended Apr. 30, ChargePoint generated $81.6 million of revenue, marking a 102% increase year over year. This was driven by a 122% increase in networked charging revenue and a 63% increase in subscription revenue.
JPMorgan analyst Bill Peterson recently reiterated an ‘overweight’ rating on ChargePoint and raised the price target to $20 — roughly 30% above where the stock sits today.
Blink Charging (BLNK)
With a market cap of around $1.1 billion, Blink Charging is a relatively underfollowed name in the world of EV stocks.
But it has delivered very generous returns to earlier investors.
At the beginning of 2020, Blink Charging was trading at less than $2 per share. Today, it’s at $22.69. You do the math.
As the company’s name suggests, it focuses on the charging side of the business.
Blink has deployed more than 51,000 EV charging ports and has over 423,000 registered users. It uses a proprietary-based software that operates, maintains, and tracks the EV stations connected to its network.
In the first half of 2022, revenue rose 223% from a year ago to $21.3 million.
The increasing adoption of EVs should continue to fuel massive growth in Blink’s business.
Needham & Company analyst Vikram Bagri has a ‘buy’ rating on Blink and a price target of $27 – implying a potential upside of 19%.
A list of EV stocks for the future would not be complete without Tesla.
The EV maker has been in the headlines lately due to its completion of a three-for-one stock split. By splitting a share into smaller pieces, each piece will have a lower, more accessible price. Those bite-size shares often draw more interest from retail investors. However, note that a split doesn’t change a company’s underlying fundamentals.
And the fundamentals still appeal to growth investors.
In Q2, the company delivered 254,695 vehicles, representing a 27% increase year-over-year. Production totaled 258,580 vehicles, up 25% from a year ago.
Tesla’s automotive revenue surged 43% year-over-year to $14.6 billion for the quarter. Total revenue grew 42% to $16.9 billion.
Wedbush analyst Dan Ives recently raised his price target on Tesla while maintaining an ‘outperform’ rating.
“We are adjusting our pre-split $1,000 price target ($333 post split) to $360 reflecting the 3:1 split as well as improved production from Tesla out of its key China Giga factory during the September quarter with clear momentum heading into year-end,” he wrote in a tweet.
Considering that Tesla trades at $295 per share at the moment, Ives’ new price target suggests a potential upside of 22%.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.