Crude oil prices have increased by more than 30% since Russia’s invasion of Ukraine to hit their highest levels since 2008 last week. This comes as Western countries impose several economic sanctions and import embargoes on Russia. Russia is the second-largest exporter of crude oil in the world. Nevertheless, the U.S. this week banned oil imports from Russia, causing prices to climb further. U.S. diesel prices are currently near their highest level since 2014, while Brent Crude is currently above $109 per barrel. As the Russia-Ukraine crisis escalates, oil analysts expect oil prices to cross $300 per barrel.
Therefore, consumers are now more likely to replace their fossil-fuel-powered vehicles with battery-run electric vehicles, given the rising cost of gasoline. With lower operating costs and federal tax credit incentives, switching to EVs now could allow people to save hundreds of dollars in gas expenses. Furthermore, as local semiconductor production ramps up, EV prices might decline marginally in the near term as production costs fall.
Given this backdrop, Wall Street analysts expect EV stocks Rivian Automotive, Inc. (RIVN), NIO Inc. (NIO), Hyzon Motors, Inc. (HYZN), Workhorse Group Inc. (WKHS), and Volcon, Inc. (VLCN) to rally more than 70% in price the near term. So, these stocks could be good additions to your watchlist.
Rivian Automotive, Inc. (RIVN)
Founded in 2009, RIVN in Irvine, Calif., is a manufacturer of electric adventure vehicles. Its offerings include electric SUVs and electric passenger pickup vehicles designed for both on-road and off-road driving. Recently it launched its R1 platform, a two-row five-passenger pickup truck.
RIVN went public through a traditional IPO process on Nov. 10, 2021. Tech-giant Amazon.com, Inc. (AMZN) had a 22.4% stake in RIVN, while Ford Motor Company (F) had a 14.4% stake in the EV start-up before its stock market debut. The company listed 153 million shares on the Nasdaq Stock Exchange at $78, raising approximately $11.90 billion in gross proceeds. RIVN’s stellar stock market debut made it the largest IPO in the United States since 2014.
RIVN sold its first electric vehicles in late 2021. It delivered 909 vehicles in its fiscal fourth quarter, ended Dec. 31, 2021, generating $54 million in revenues. Its cash and cash equivalents balance stood at $18.42 billion as of Dec. 31, 2021, up 511.9% from the same period last year.
RIVN plans to manufacture 25,000 vehicles across its R1 and RCV platforms in 2022. The $3.16 billion consensus revenue estimate for its fiscal year 2022 indicates a 5650% improvement year-over-year. In addition, the Street expects the company’s EPS to rise 66.4% in the current year.
Shares of RIVN have declined 13.1% in price over the past five days. However, the $97.73, 12-month median price target indicates a 137.4% potential upside from its last closing price of $41.16. The price targets range from a low of $47.00 to a high of $148.00. Among 12 analysts that rated RIVN, eight rated it Buy while four rated it Hold.
NIO Inc. (NIO)
Headquartered in Jiading, China, NIO Inc. is a pioneer and leading high-end smart electric vehicles manufacturer. It provides power solutions, battery swapping services, rapid charging, vehicle internet assistance, and extended lifetime warranties. Dubbed the “Tesla of China,” NIO is a leading EV manufacturer globally.
On March 10, NIO listed its class A shares on the Hong Kong Stock Exchange. These shares are fully fungible with the American depository receipts listed on the NYSE.
NIO’s vehicle deliveries increased 9.9% year-over-year to 6,131 vehicles last month. The company has delivered 15,783 vehicles in the first two months of 2022, representing a 23.3% increase from the same period last year.
NIO’s total revenue increased 116.6% year-over-year to RMB9.81 billion ($1.55 billion) in its fiscal third quarter, ended Sept. 30, 2021. The company’s vehicle sales increased 102.4% year-over-year to RMB8.64 billion ($1.37 billion). Its gross margin rose 740 basis points year-over-year to 20.3%, while its vehicle margin improved 350 basis points from the same period last year to 18%. Its gross profit came in at RMB1.99 billion ($314.74 million), reflecting a 240.3% rise from the prior-year quarter.
The $1.71 billion consensus revenue estimate for its fiscal first quarter (ending March 2022) represents a 39% increase from the same period last year. Analysts expect the company’s EPS to rise 66.7% in the current quarter.
Shares of NIO have slumped 43.9% in price year-to-date. Nonetheless, the 12-month median price target of $52.59 indicates a 196% potential upside from yesterday’s closing price of $17.77. The price targets range from a low of $30.00 to a high of $87.00. Among the 13 Wall Street analysts that rated NIO, 11 rated it Buy while two rated it Hold.
Hyzon Motors Inc. (HYZN)
HYZN in Honeoye Falls, N.Y., is a global supplier of hydrogen-powered commercial vehicles and fuel cell systems. It manufactures medium- and heavy-duty trucks and city and coach buses. The company also operates in Europe, Singapore, Australia, and China. It went public through an SPAC deal with blank check company Decarbonization Plus Acquisition Corporation on July 19 last year.
On March 1, 2022, HYZN signed a Memorandum of Understanding (MoU) with leading British logistics group John G Russell Transport to deploy hydrogen-powered, zero-emissions vehicles in the U.K. The collaboration should allow HYZN to strengthen its market reach in the U.K.
Last month, the company entered into a vehicle supply agreement with the leading Swedish transport group, MaserFrakt. This partnership should allow HYZN to sell its hydrogen-powered heavy trucks in Sweden.
HYZN generated its first vehicle revenues, amounting to $962,000, in its fiscal third quarter, ended Sept. 30, 2021. Its net income came in at $31.25 million, compared to a $556 net loss in the prior-year quarter. Its EBITDA rose 6909% from the same period last year to $31.73 million.
Analysts expect HYZN’s revenue to increase 578.5% year-over-year to $139.16 million in its fiscal year 2022. The consensus EPS estimate for the current year indicates a 14.7% improvement from the same period last year.
Shares of HYZN have risen 21.9% in price over the past month to close the last trading session at $6.19.
Among five Wall Street analysts that rated HYZN, three rated it Buy while two rated it Hold. The 12-month median price target of $12.50 indicates a 101.9% potential upside from yesterday’s closing price of $6.19. The price targets range from a low of $7.00 to a high of $21.00.
Workhorse Group Inc. (WKHS)
WKHS is a tech-focused drone-integrated EV manufacturer that designs, manufactures, and sells zero-emission commercial vehicles in the United States. Its offering includes C-series electric delivery trucks, package delivery aircraft, HorseFly, and Metron telematics systems platform. WKHS is headquartered in Loveland, Ohio.
WKHS has entered a multi-year supply agreement with leading zero-emission EV manufacturer GreenPower Motor Company Inc. WKHS CEO Rick Dauch said, “Our partnership with GreenPower is a crucial step in a multi-pronged effort to redefine our product portfolio. The Class 4 W750, alongside our legacy Class 3 C-1000 and W56 platform launching in 2023, will enable Workhorse to address the entire Class 3-6 commercial vehicle market. I am very pleased to have reached this important agreement, and we look forward to working closely with the GreenPower team to make the first truck deliveries from our Union City, Indiana plant later this year.”
WKHS’ cash and cash equivalents balance stood at $201.65 million as of Dec. 31, 2021, reflecting a 330.7% year-over-year increase.
The $126.73 million consensus revenue estimate for its fiscal year 2023 indicates a 434.6% improvement year-over-year. The Street expects the company’s EPS to improve 28.8% from the same period last year in fiscal 2023.
WKHS stock has gained 11.2% in price over the past month.
Among six Wall Street analysts that rated WKHS, four rated it Buy while two rated it Hold. The 12-month median price target of $6.75 indicates a 75.3% potential upside from yesterday’s closing price of $3.85. The price targets range from a low of $5.00 to a high of $11.00.
Volcon, Inc. (VLCN)
Incorporated in 2020, VLCN is the first all-electric Powersports company that produces high-quality off-road vehicles. The Round Rock, Tex., concern offers two- and four-wheel electric motorcycles and utility terrain vehicles. VLCN is poised to become the electric vehicle capital of the world. Its first electric-powered motorcycle, named Volcon Grunt, began shipping in the third quarter of 2021.
VLCN made its stock market debut on Oct. 8, 2021, by listing 3.03 million shares on the Nasdaq stock exchange. The company raised more than $15 million in net proceeds from the IPO. Also, VLCN received an additional $1.10 million after underwriters exercised their over-allotment option to sell an additional 226,875 shares.
On February 1, the company completed a secondary underwritten public offering of 6.67 million shares, priced at $3. VLCN raised $20 million in gross proceeds through this offering, which is expected to fund the company’s operating and general corporate expenses. VLCN stands to receive an additional $3 million if the underwriter’s overallotment option is exercised in full.
As of March 3, 2022, VLCN signed 60 dealerships in the United States within four months. This marks strong demand for VLCN’s products among early adopters.
The company made its Grunts delivery to customers on Sept. 15, 2021. Its revenues for its fiscal third quarter (ended September 30, 2021) came in at $75,000.
Analysts expect VLCN’s EPS to increase 76.4% year-over-year in its fiscal year 2022.
Over the past month, the stock has gained 23.01% in price. VLCN is expected to hit $6 soon, reflecting a 115.8% potential upside from yesterday’s closing price of $2.78.
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RIVN shares were trading at $38.29 per share on Friday afternoon, down $2.87 (-6.97%). Year-to-date, RIVN has declined -63.07%, versus a -10.66% 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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