With growing awareness among people about climate change, the demand for cleantech stocks are gradually increasing. In addition to companies that produce solar and wind energy, the cleantech industry includes other types of green-energy stocks. The rising demand for cleantech is evident from the Invesco Cleantech ETF’s (PZD) 32.5% year-to-date gain versus the S&P 500’s 12.3% return over the same period.
With Joe Biden winning the presidential election, the situation for cleantech stocks is expected to be more favorable. As part of his plan, Biden is expected to make historic investments in clean energy and climate research and innovation so that the United States achieves net-zero emissions no later than 2050. Moreover, the electrical vehicles (EV) market is growing at an unprecedented rate in China.
While some cleantech stocks are already gaining due to the increased demand, some are still relatively unknown. NIU Technologies (NIU), AeroVironment, Inc. (AVAV), and Kandi Technologies Group, Inc. (KNDI) are three such little-known cleantech stocks that are well-positioned to gain due to this trend.
Niu Technologies (NIU)
Headquartered in Beijing, China, NIU was founded in 2014. The world’s leading provider of smart urban mobility solutions, NIU is involved in designing, manufacturing, and sale of lithium-ion battery-powered e-scooters. The company’s portfolio consists of seven series NQi, MQi, UQi, NIU Aero, Gova, RQi, TQi. Among other services, NIU also offers online repair requests, DIY repairs, and a service station locator.
NIU’s total revenue increased 21.6% year-over-year to $91.3 million for the second quarter that ended June 2020. It was mainly driven by retail network expansion and new product launches in China. E-scooter sales from the China market increased 58.5% year-over-year. Net income increased 11.5% year-over-year to $8 million. NIU’s EPS for the second quarter was $0.13, which surpassed the consensus estimate by 44.4%. Driven by the launch of the G0, MQi2, and MQiS earlier this year, NIU’s e-scooter sales volume for the third quarter (ended September 2020) increased 67.9% year-over-year to 250,889.
Analysts expect NIU’s revenue to increase 37.7% this year, and 68.3% next year. The company’s EPS is expected to grow 20.5% this year, 78.7% next year, and at a rate of 5.9% per annum over the next five years. NIU’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
NIU is expected to release its financial results for the third quarter on November 23rd before the market opens. The company has been expanding aggressively internationally. Last month, the company opened its own flagship store in Bristol, United Kingdom. The company also opened a store in Porto, Bergamo and Jakarta among other places. The stock closed Monday’s trading session at $32.98, gaining 283.5% year-to-date. It is presently trading 13.5% below its 52-week high of $37.44.
How does NIU stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #10 out of 30 stocks in the Technology – Hardware industry.
AeroVironment, Inc. (AVAV)
Operating over four decades, AVAV is a technology solutions provider that designs, develops, produces, and supports an advanced portfolio of unmanned aircraft systems (UAS). The company mainly deals with organizations within the United States’ Department of Defense and international allied governments. AVAV aims to secure lives and advance sustainability through transformative innovation.
AVAV’s revenue from Contract services increased 38.1% year-over-year to $29.1 million for the fiscal year 2021 first quarter that ended August 1st, 2020. Revenue increased 1% sequentially to $87.5 million. Analysts expect AVAV’s revenue to increase 10.1% in 2021, and 9.3% in 2022. The company’s EPS is expected to grow 2.2% in 2021, 14.9% in 2022, and at a rate of 14% per annum over the next five years. The company’s earnings per share of $0.44 surpassed the consensus estimate by 10%. In fact, AVAV’s earnings surprise history looks impressive with the company missing the consensus estimate in just one of the trailing four quarters.
On September 25th, AVAV secured a $8.4 million contract award by the U.S. Department of Defense for its Puma™ 3 AE tactical UAS, training and support to an allied nation. Last month, the company’s Sunglider solar-powered high-altitude pseudo-satellite (HAPS) reached an altitude of more than 60,000 feet above sea level, achieving a milestone. It also successfully demonstrated mobile broadband communication. AVAV introduced the new Switchblade 600, which offers expanded capabilities for engaging larger, hardened targets at greater distances, as part of the family of loitering missile systems. The stock has gained 35.4% year-to-date. It is currently trading just 4.1% below its 52-week high of $87.
AVAV’s POWR Ratings reflect this promising outlook. It has an overall rating of “Strong Buy” with an “A” for Trade Grade, Buy & Hold Grade, and Peer Grade. Among the 65 stocks in the Air/Defense Services industry, it’s ranked #5.
Kandi Technologies Group, Inc. (KNDI)
Founded in 2004, KNDI is one of the leading electric vehicle supply chain companies in China. The company designs, develops, manufactures, and commercializes electric vehicles (EVs), EV parts, and off-road vehicles. KNDI operates through four business lines: the development and sale of pure electric automobiles, electric vehicle parts such as battery packs, motors, etc., intelligent battery swapping systems, and all-terrain vehicles.
KNDI’s off-road vehicle sales increased 51.6% year-over-year to $8.90 million for the third quarter that ended September 2020. Gross margin was 20.9% versus 16.7% a year ago. In September, the company established the China Battery Exchange Technology Company, a wholly-owned subsidiary for its battery swapping services. Analysts expect KNDI’s revenue to increase 76.7% in 2021. The company’s loss per share of $0.03 surpassed the consensus estimate by 72.7%.
On November 12th, KNDI raised $60 million through a purchase agreement of 9.40 million common shares to institutional investors. The company started the process to list its wholly owned subsidiary, Zhejiang Kandi Smart Battery Swap Technology Co, Ltd on the Shanghai Stock Exchange’s Sci-Tech Innovation Board (“STAR”) market. KNDI entered into a strategic agreement with the Zhejiang State Grid Electric Vehicle Service Company. On a year-to-date basis, KNDI has rallied 69.6% to close yesterday’s session at $8.02. During the past six months, KNDI soared 159.6%.
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NIU shares were trading at $33.59 per share on Tuesday morning, up $0.61 (+1.85%). Year-to-date, NIU has gained 293.79%, versus a 13.16% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...
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