Governments around the globe are investing heavily to transition to green technology to address climate change concerns. The Biden administration, for its part, has set a goal  of half of new vehicles sold to be battery-electric or cell-powered by 2030. Aligned with this, a U.S. House of Representatives panel earlier this month proposed $13.5 billion spending on electric vehicles (EV) infrastructure.

The North American EV market is expected to grow at a 37.2% CAGR  over the period 2021 – 2028, aided by the rebounding semiconductor industry from a supply shortage and declining input costs.

Given the industry’s solid growth prospects, Wall Street analysts expect EV stocks Hyliion Holdings Corp. (HYLN), Electric Last Mile Solutions, Inc. (ELMS), and Workhorse Group Inc. (WKHS), which are currently trading at less than $10, to rally by more than 55% in price in the near term.

Click here to checkout our Electric Vehicle Industry Report for 2021

Hyliion Holdings Corp. (HYLN)

HYLN in Cedar Park, Tex., manufactures and sells hybrid and electric powertrains for the commercial transport industry. The company went public in a reverse merger with Tortoise Acquisition Corp. on October 1, 2020.

On August 31, HYLN launched its new and enhanced Hybrid Powertrain system model with a simpler design and a reduced net system weight for greater efficiency. The commercialization of the new model amid the growing hybrid automobiles’ market should allow the company to generate substantial revenues in the coming months.

Also in August, HYLN signed a reservation agreement with Texas-based frac sand solutions provider Detmar Logistics LLC that covers 300 electric powertrain systems. With this agreement, HYLN aims to fully electrify its fleet over the next five years, catering to the rising demand for environment-conscious solutions with lower cost and greater flexibility.

In the six months ended June 30, HYLN’s net cash provided by financing activities increased 335.3% year-over-year to $15.85 million. At the close of the period, its  cash and cash equivalents climbed  9,524.7% from the same period last year to $317.71 million.

A $46.79 million  consensus revenue estimate for the next year (fiscal 2022) indicates a 5,748.8% increase year-over-year. Furthermore,  HYLN has an impressive surprise earnings history; it has topped the consensus EPS estimate in each of the trailing four quarters. Over the past five days, the stock has gained 3.6% in price to close Friday’s trading session at $8.68.

Two Wall Street analysts rating HYLN have rated it Buy. The 12-month median price target of $14.50 indicates a 67.1% potential upside. The price targets range from a low of $12.00 to a high of $17.00.

Electric Last Mile Solutions, Inc. (ELMS)

ELMS is an EV company providing commercial electric vehicles. The Auburn Hills, Mich.-based company engineers and manufactures  electric last-mile delivery and utility vehicles. It went public on June 28, 2021, following its reverse merger with blank check company Forum Merger III Corporation, which is expected to help the company capitalize on the growing e-commerce industry in North America.

On September 22, ELMS received a purchase order from its partner, Randy Marion Automotive Group. for 1,000 units of its Urban Delivery Vehicle. Regarding this order, ELMS CEO James Taylor said, “This order is reflective of the work that we do with our customers and sales channel partners to understand and meet their unique business needs.”

On September 16, the company opened its Asia Pacific Operations Center (APOC) in Shanghai, China. The establishment of this facility marks the expansion of ELMS’ global footprint.

In July, ELMS signed a long-term supply agreement with Chinese automotive component and cargo van manufacturer Liuzhou Wuling Automobile Industry Co., Ltd. The company expects this agreement to broaden its capabilities, enabling ELMS to bring segment-defining, customized EVs to market.

For the six months ended June 30, the company’s net cash provided by financing activities increased 5,983.6% year-over-year to $240.61 million. Its total cash, cash equivalents, and restricted cash balance grew 762.7% over the six months to $217.43 million at the end of the period. ELMS’ stock has gained 3.5% in price over the last five days to close Friday’s trading session at $7.64.

Six Wall Street analysts that rated ELMS have rated it Buy. The 12-month median price target of $15.17 indicates a 98.6% potential upside. The price targets range from a low of $13.00 to a high of $18.00.

Workhorse Group Inc. (WKHS)

WKHS manufactures battery-electric vehicles and aircraft, providing mobility solutions to the commercial transportation sector. The company also offers cloud-based and real-time telematics performance monitoring systems. WKHS is headquartered in Loveland, Ohio

On August 31, WKHS collaborated with fleet maintenance provider Amerit Fleet Solutions to provide warranty and repair services for WKHS’s customers and jointly provide maintenance solutions. The agreement should enable the company to provide a customized EV experience to its customers.

Also in August, WKHS entered a pilot program with the Natural resources Conservation Service (NRCS) for providing Unmanned Aerial Systems (UASs). Regarding this agreement, Workhorse President – Aerospace John Graber said, “Engaging in this pilot agreement with the NRCS is the first step in expanding our footprint beyond package delivery and the last mile delivery space.”

In the three months ended June 30, WKHS’s net sales increased 1,208.3% year-over-year to $1.20 million. Its cash equivalents came in at $156.61 million for the six months ended June 30, up 497.8% from the same period last year.

The Street expects the company’s revenue to increase 164.1% year-over-year to $4.78 million in the current quarter (ending September 2021). Analysts expect EPS to increase 55.1% year-over-year in the current quarter.

The stock declined marginally intra-day to close Friday’s trading session at $7.52.

Of the four Wall Street analysts rating WKHS, two have rated it Buy. The 12-month median price target of $11.75 indicates a 56.3% potential upside. The price targets range from a low of $7.50 to a high of $18.00.

Click here to checkout our Electric Vehicle Industry Report for 2021

HYLN shares were trading at $9.52 per share on Monday afternoon, up $0.84 (+9.68%). Year-to-date, HYLN has declined -42.23%, versus a 19.72% rise in the benchmark S&P 500 index during the same period.

About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...

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