Nikola Corporation (NKLA) had made some big promises regarding its first-of-its-kind hydrogen fuel-cell-powered electric truck when going public through a SPAC in June. As investors bought into the hype, NKLA gained 178.5% within just 5 days to hit its all-time high of $93.99.
However, it appears that the company’s promises are too good to be true. Several allegations against NKLA CEO Trevor Milton regarding the progress in production and the type of technology used led to a steep decline in its price.
While investors who held a long position in NKLA witnessed significant losses so far, they may consider betting on several other EV companies that are surging at the moment. With strong fundamentals, companies such as Tesla, Inc. (TSLA), Blink Charging Co. (BLNK), and Fisker, Inc. (FSR) are well-positioned to significantly benefit from the ongoing EV trend. TSLA and BLNK have a sturdy market reputation and they delivered impressive quarterly results. FSR, on other hand, though a relatively new company, is founded and headed by Henrik Fisker, a popular name in the automobile industry, with over 40 years of experience.
Tesla, Inc. (TSLA)
TSLA has been a red-hot stock this year, with 579.9% gains year-to-date. The surging prices led to a 5-for-1 stock split earlier this year, in August, after CEO Elon Musk himself claimed the stock to be overvalued.
However, bullish investor sentiment was justified, as the company generated profits for five consecutive quarters, leading to its inclusion in the S&P 500 index, effective December 21st. Musk’s private wealth increased significantly with TSLA’s success and he is currently the second richest person in the world.
However, a leaked email sent by Musk to his employees shows rising concerns of the internal management over the low profitability and high costs of the company, which can lead to a potential stock crash, if left unchecked.
However, TSLA vehicles are currently being investigated by the National Highway Traffic Safety Administration (NHTSA), after more than 29,000 Model X and Model Y vehicles were recalled in China.
TSLA is currently planning to launch three new electric vehicles soon, including the Tesla Cybertruck and 2 electric cars. It is planning to invest up to $12 billion in electric vehicles and battery factories over the next two years, with manufacturing facilities in three continents. The company raised $4.97 billion through an at-the-market stock offering in September to fund its capital-intensive projects soon. The company is currently working on developing the fully autonomous driving feature, which should be integrated into TSLA vehicles in some jurisdictions by 2021.
Moreover, TSLA is reportedly planning to launch its products in India in 2021. With a huge population and thereby market base, this expansion is expected to ramp up the profits for the company. TSLA also has plans to open a new battery system project in Australia, which has been dubbed as ‘Big Tesla Battery’. In this regard, TSLA partnered with French renewable company Neoen to develop 300/ 450 MWh in South Australia.
After successfully dominating the electric vehicle industry, TSLA is currently venturing into other sectors. The company’s prior acquisition of Solar city in 2016 has given it a smooth entry point in the solar panel manufacturing industry. CEO Elon musk expects this segment to become the next “killer product” by 2021. Total solar deployments in the third quarter ended September 2020 more than doubled sequentially to 57 MV, while solar roof deployments tripled over this period.
TSLA also joined the tequila business on November 7th, launching its uniquely shaped tequila bottles through its official website, which sold out within hours.
Following the news release of Pfizer and BioNTech vaccine, Musk confirmed that TSLA became the manufacturing partner for German biotech firm CureVac, and is currently in the process of developing RNA micro-factories and version 3 vaccine printers.
TSLA reported impressive results for the third quarter ended September 2020, surpassing analyst expectations. Its EV deliveries increased 7% year-over-year (subject to operating lease accounting) over this period. Revenue increased 39% year-over-year to $8.77 billion, while gross profit rose 73% from the same period last year to $2.06 billion. Its net income and EPS rose 131% and 69%, respectively.
The consensus EPS estimate of $0.87 for the current quarter ending December 2020 indicates a 112.2% improvement year-over-year. The company has an impressive earnings surprise history as well, as it beat the street EPS estimates in each of the trailing four quarters. Analysts expect TSLA’s revenue to increase 36.1% from the same period last year to $10.05 billion in the fourth quarter.
How does TSLA stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating.
You can’t ask for better. It is currently ranked #1 out of 34 stocks in the Auto & Vehicle Manufacturers 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 4th, BLNK acquired EV charging operator U-Go Stations, Inc., adding 44 new locations to BLNK’s portfolio charging points.
Earlier in October, BLNK installed 6 levels 2 IQ 200 EV charging stations in Edgewood real estate investment trust multifamily properties in Missouri.
BLNK’s revenues increased 18% year-over-year to $0.90 million in the third quarter ended September 2020. This can be attributed to a 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% next year. The consensus revenue estimate of $1.50 million for the fourth quarter ending December 2020 indicates a 113.7% improvement year-over-year. Revenue is expected to rise by 89.4% next year.
BLNK gained 2,673.6% to hit its 52-week high of $34.67 in November, since hitting its 52-week low of $1.25 in March.
It’s no surprise that BLNK is rated “Buy” in our POWR Ratings system, with an “A” for Trade Grade. It is currently ranked #14 out of 36 stocks in the Specialty Retailers industry.
Fisker, Inc. (FSR)
Founded by Henrik Fisker, FSR made its public debut through a reverse merger in October. The company went public through a SPAC with Apollo Global Management affiliated Spartan Acquisition Energy Corporation on October 30th, making it one of the newest players in the electric vehicle market. The company has generated $1 billion in cash through the merger, including $500 million through common stock PIPE funding. The stock has gained 94.6% since its debut.
FSR is expected to launch a Fisker Ocean vehicle in 2022, and three vehicles by 2025. The company recently partnered with auto supplier Magna International to supply the vehicle platform and build its Ocean SUV.
On October 21st, FSR announced a strategic partnership with Viggo Sign for the delivery of 300 vehicles in the fourth quarter of 2020. Earlier, in July, FSR announced entering into advanced talks with Extreme E for a potential strategic partnership and works team entrance.
FSR is expected to commercially launch its EVs in 2022. Analysts expect FSR’s EPS to rise 123.1% year-over-year for the year ending December 2021.
FSR gained more than 170% within a month to hit its 52-week high in November, since hitting its 52-week low of $8.70 in October. Under POWR Ratings, the company has been accorded an “A” rating for Industry Rank. Within the Auto & Vehicle Manufacturers industry, it’s ranked #27 out of 34 stocks.
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NKLA shares were trading at $18.60 per share on Thursday afternoon, up $0.28 (+1.53%). Year-to-date, NKLA has gained 80.23%, versus a 15.73% 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...
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