The ongoing digital transformation of most industries and increasing use of advanced technologies are driving the growth of the technology industry. And the industry’s solid growth prospects are attracting great interest in tech stock by investors. Indeed, the tech-heavy Nasdaq Composite hit its all-time high of 14,649.11 on July 5.
Furthermore, the fledgling electric vehicle (EV) industry has been incentivizing tech companies to venture into this space. With major countries announcing their plans to phase out fossil-fuel-powered vehicles over the next couple of decades, multiple capital investments, and favorable policies, companies manufacturing products and services that facilitate EVs should grow significantly.
So, notwithstanding short-term headwinds created by a current semiconductor shortage, Wall Street expects the EV and ancillary industries to grow significantly. Wall Street analysts expect tech stocks Ideanomics, Inc. (IDEX) and CleanSpark, Inc. (CLSK), which have substantial exposure to the EV industry, to rally more than 160% in the coming months.
Ideanomics, Inc. (IDEX)
IDEX is focused on sustainability transformation by facilitating the adoption of commercial electric vehicles, associated energy consumption, and developing financial services and fintech products. The company operates in the United States, China, Ukraine, Malaysia, and the U.K.
On June 24, IDEX announced the acquisition of Solectrac Inc., a manufacturer and distributor of premium zero-emission electric tractors. The acquisition should allow IDEX to strengthen its position in the EV industry. Earlier in June, IDEX acquired U.S. Hybrid, a manufacturer and distributor of electric powertrain components and fuel cell engines.
On June 3, Twin Transit Authority (TTA) in Washington completed installation of WAVE’s (a subsidiary of IDEX) high-power wireless charging system for electric buses. This marks a new addition to IDEX’s growing list of transit fleet charging stations.
IDEX’s total revenues increased 8,553.2% year-over-year to $32.71 million in its fiscal first quarter, ended March 31. Its gross profit stood at $10.84 million, up 24,540.9% from the same period last year.
Analysts expect IDEX’s revenues to increase 382.8% year-over-year to $129.2 million in the current year. The company’s EPS is expected to improve 82.8%. Shares of IDEX have gained 73.9% over the past year, and 33.7% over the past six months.
The $7.00 median price target indicates a potential 163.2% upside from its last closing price of $2.66.
CleanSpark, Inc. (CLSK)
CLSK is a provider of diversified software and intelligent energy services worldwide. The company offers software and intelligent controls for microgrid and distributed energy resource management systems and strategy and design services. Its product line includes mPulse, Switchgear and mVSO software platforms. CLSK was added to the Russell 2000 ® Index on June 28.
On June 2, CLSK agreed with Pioneer Power Solutions, Inc. (PPSI) on rights to serve as a preferred distributor of PowerBloc, an EV power system solution. Amid the growing need for charging infrastructure for EVs, this collaboration should be beneficial for CLSK in several aspects.
On May 27, CLSK signed a memorandum of understanding with international wind turbine technology company FlowGen Ltd., with the objective of leveraging the expertise of both companies to deliver enhanced and efficient systems to their collective customer base.
CLSK’s revenues increased 122% year-over-year to $8.12 million in the fiscal quarter ended March 31. Its net income increased 227.3% year-over-year to $7.40 million over the period. The company’s EPS increased 119.5% year-over-year to $0.22.
A $25.84 million consensus revenue estimate for the current quarter, ending September 2021, indicates a 1,221.7% improvement from the same period last year. Analysts expect the company’s EPS to come in at $0.24 in the current quarter, indicating a 300% rise year-over-year. Also, CLSK surpassed the Street’s EPS estimates in three of the trailing four quarters. CLSK has gained 571.8% over the past year. The stock has gained 1.4% intraday to close yesterday’s trading session at $16.46.
The two Wall Street analysts that rated CLSK, rated it Buy. Their $47.50 median price target indicates a potential 188.6% potential upside from its last closing price of $16.46. The 12-month price targets range from a low of $45.00 to a high of $50.00.
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IDEX shares were trading at $2.61 per share on Tuesday afternoon, down $0.05 (-1.88%). Year-to-date, IDEX has gained 31.16%, versus a 16.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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