Investing in emerging technologies is always an exciting option. It provides investors with the chance to derive outsized gains and increase their capital at an exponential rate. Alternatively, it is not an option for conservative or risk-averse investors due to the disruptive nature of this space.

That being said, one such emerging industry is the electric vehicle (EV) infrastructure industry. The shift to clean energy solutions should drive the demand for EVs higher in the upcoming decade which makes infrastructure stocks such as ChargePoint (CHPT) and Beam Global (BEEM) solid long-term bets today.

According to an IEA (International Energy Agency) report, the number of EVs might rise from just 10 million in 2019 to 140 million by 2030. It could rise to 245 million in case governments all around the world support and subsidize clean energy solutions.

So, let’s take a look to see which EV infrastructure stock should be on your buying list.

ChargePoint is valued at a market cap of $6.9 billion

ChargePoint Holdings provides EV charging networks and solutions in the U.S. The company which is valued at a market cap of $6.9 billion offers a portfolio of hardware, software, and services for a range of commercial, fleet, and retail customers.

In fiscal 2021 (ended in January), ChargePoint reported sales of $146.5 million and ended the year with more than 132,000 charging points in Europe and North America. While still unprofitable, ChargePoint is expected to narrow its loss per share from $7.77 in fiscal 2021 to just $0.26 per share in fiscal 2023. The company is also forecast to increase sales to $204 million in 2022 and to $345 million in 2023.

This growth in revenue and improvement in the bottom line will allow ChargePoint to post a breakeven EBITDA by fiscal 2024. ChargePoint grew sales by 60% in 2019 and its top-line growth has decelerated amid COVID-19. However as seen above, revenue growth will gain pace going forward.

ChargePoint is focusing on enterprise partnerships and its sales do not depend on the utilization of its charging stations. ChargePoint derives revenue from a company that provides EV charging as an incentive to its employees. CHPT has over 4,000 commercial customers and is one of the top stocks in the EV infrastructure space.

Beam Global is a small-cap stock

A cleantech company, Beam Global designs, develops, manufactures, and sells products for EV charging infrastructure as well as energy security products. Its portfolio includes EV ARC, an autonomous renewable charger that leverages integrated solar power and battery storage providing a power source for factory-installed EV charging stations.

In 2020, Beam Global reported sales of $6.21 million, and analysts expect revenue to increase by 123.3% to $13.87 million in 2021 and by 97.3% to $27.4 million in 2022. Its loss per share is also forecast to improve from $0.84 in 2020 to $0.28 in 2021.

In the March quarter, Beam Global reported a loss per share of $0.14 which was narrower than a loss of $0.17 per share as forecast by Wall Street. However, its sales growth was less than impressive in Q1 of 2021. Beam Global reported sales of $1.37 million in Q1 compared to $1.31 million in the prior-year period.

The verdict

ChargePoint stock is trading at a forward price to sales multiple of 33.8x and this multiple for Beam Global is higher at 35.75x. The two companies are part of expanding markets and will have multiple secular tailwinds that will allow them to grow revenue and improve profitability in CY 2021 and beyond. However, ChargePoint is a more established player compared to Bean Global making it a better long-term pick right now.

Analysts tracking CHPT stock have a 12-month average target price of $38.5 which means ChargePoint is trading at a discount of 65% to consensus estimates. Comparatively, Beam Global stock is trading at a discount of 141% to analyst estimates. While Beam Global has the potential to generate higher returns it also carries significant risks compared to ChargePoint.

CHPT shares were trading at $23.57 per share on Tuesday morning, up $0.17 (+0.73%). Year-to-date, CHPT has declined -41.19%, versus a 12.67% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditya Raghunath

Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist. More...

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