The EV industry has been one of the most consistent performers of 2020. Major companies operating in this space saw a steady rise, despite volatile financial markets. Along with bullish investor sentiment, the industry has enjoyed the support of major governments worldwide as the global automotive industry begins transitioning to greener future.
While Tesla, Inc. (TSLA) is the first name that typically comes to mind when one talks about electric vehicles, the company’s sky-high valuations and relative low profitability are sobering. Furthermore, with the Democratic Party on the verge of gaining control of all branches of Congress, TSLA’s perceived monopoly position in the EV space might be short lived, given the Democratic party’s dour view of industry monopoly.
All this, however, should be good news for Chinese EV manufacturer NIO Limited (NIO), which has been demonstrating impressive growth potential and the technological prowess to compete with the world’s largest EV manufacturer. Also, NYSE’s decision not to delist the Chinese companies despite President Trump’s orders has driven the stock higher. With the United States potentially assuming a more tolerant or constructive attitude towards Chinese companies with the Biden administration, NIO may now have a more solid entry point to market its EVs in the country. The company’s cost-effective vehicles should work in its favor, given TSLA’s relatively higher-priced models.
Blink Charging Co. (BLNK), should also benefit from the Democratic Party coming to power, given the Biden administration’s ambitious goal of making the United States carbon neutral within the next four decades. We think the company’s strategic partnerships and expansion plans makes it well-positioned to become a leading operator of EV charging stations around the country.
NIO Limited (NIO)
Chinese EV manufacturer NIO gained popularity in 2020 and still has plenty of room to grow this year. The company’s unique business model, flagship vehicles, ‘battery as a service’ subscription plans, and lower cost of production has deemed it the ‘Tesla of China’.
NIO has delivered more than 7,000 vehicles as of December31,2020, up 121% year-over-year. Deliveries for the third quarter ended December 31, 2020 have increased 111% from the year-ago value to 17,353 vehicles.
NIO recently raised approximately $2.65 billion through American Depositary shares offering. Given the strong market demand for its stock, underwriters exercised a Greenshoe option to issue 10.20 million additional ADS.
In November, NIO launched a 10kWh battery with upgrade plans. With 37% higher energy density, the new battery is expected to boost NIO vehicles to a range of up to 615 km, while improving space utilization by 19.8%. This should boost the demand for the batteries for upgrading, as well for newer NIO models.
NIO’s total revenues have increased 146.4% year-over-year to RMB 4.53 billion in the third quarter ended September 30, 2020. Vehicle sales grew 146.1% from the same period last year to RMB 4.27 billion. Gross profit rose significantly over this period to RMB 585.80 billion, compared to negative year-ago value.
Analysts expect NIO’s EPS to rise 76.9% in the fourth quarter ended December 31, 2020, and 45.9% in fiscal 2021. The company has an impressive earnings surprise history; it beat the Street EPS estimates in three of the trailing four quarters. The consensus revenue estimate of $992.12 million for the about-to-be reported quarter indicates 143.8% growth year-over-year.
NIO has gained more than 2,610% to hit its 52-week high of $57.20 in November since hitting its 52-week low of $2.11 in March. The stock has gained 1,289% over the past year.
How does NIO stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
A for Overall POWR Rating.
It is currently ranked #13 of 115 stocks in the China industry.
Blink Charging Co. (BLNK)
BLNK owns and operates electric vehicle charging equipment and network charging stations across the United States. Its primary product line includes Blink EV Charging network, EV charging equipment, and EV related services.
BLNK recently introduced innovative cable management solutions for its charging stations, allowing the company to maintain its equipment easily, while ensuring the safety of users. On November 4, BLNK acquired EV charging operator U-Go Stations, Inc., adding 44 new locations to BLNK’s portfolio charging points.
With the country taking active steps to transform public transport systems with electric vehicles, BLNK partnered with Lion electric company in December to capitalize on the emerging trend. Under this agreement, Blink charging stations will be established with Lion EV school fleets and other vehicles.
The company signed similar agreements with Lehigh Valley Health Network and Blessing Health Systems in the same month. These partnerships allow BLNK to expand its operations across the country, thereby establishing its foothold in the EV charging space.
BLNK’s revenues have increased 18% year-over-year to $0.90 million in the third quarter ended September 30, 2020. This can be attributed to 74% rise in product sales, and an 87% rise in Blink-owned chargers deployed across the country.
Analysts expect BLNK’s EPS to rise 15.2% in fiscal 2021. The consensus revenue estimate of $10 million for this year represents an 89.4% improvement year-over-year.
BLNK has gained more than 3,145% since hitting its 52-week low of $1.25 in March. The stock hit its 52-week high of $56.12 on December 28.
It is no surprise that BLNK is rated “Buy” in our POWR Ratings system, with an “A” for Trade Grade. It is currently ranked #10 of 40 stocks in the Specialty Retailers industry.
Want More Great Investing Ideas?
NIO shares were trading at $50.50 per share on Wednesday afternoon, down $2.70 (-5.08%). Year-to-date, NIO has gained 3.61%, versus a -0.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|NIO||Get Rating||Get Rating||Get Rating|
|BLNK||Get Rating||Get Rating||Get Rating|