2021 is shaping up to be a pivotal year for the electric vehicle industry, given the global push for a green energy ecosystem, rising sales of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), and an increased demand for EVs due to government incentives. According to IHS Markit, the global EV sales is expected to rise by approximately 70% this year.
Indeed, President Joe Biden’s plans to replace federal government’s fleet of cars and trucks with zero-emission electric vehicles manufactured in the United States should unleash an avalanche of new EV demand in the EV market. Because the EV boom is just getting started, Wall Street analysts expect high growth from some prominent EV stocks.
The continuing fundamental shift from traditional, internal combustion engines to electric engines has caused Wall Street analysts to upgrade the ratings of prominent EV players Tesla, Inc. (TSLA), Fisker Inc. (FSR), and Nikola Corporation (NKLA). Their compelling product portfolios and unique and expansive distribution networks should help the stocks witness solid gains in the near term.
Tesla, Inc. (TSLA)
Headquartered in Palo Alto, California, TSLA is the world’s best-selling plug-in and battery electric vehicle car manufacturer. The company operates internationally, through two segments – Automotive and Energy Generation, and Storage.
Last year, TSLA ramped up its Model 3 production in China to more than 5000 cars per week. Furthermore, its Model Y production in Shanghai has begun with deliveries expected to begin shortly. Also, TSLA has ramped up production of its Model Y in Fremont.
This year, TSLA remains on track to begin vehicle production with structural batteries in Berlin and Austin. The company has also boosted its Model S and Model X production and expects to deliver its first Tesla Semi by year’s end.
In the fourth quarter, ended December 31, 2020, TSLA’s total revenues increased 46% year-over-year to $10.74 billion. Its gross profit has risen 49% from the same period last year to $2.07 billion, while its non-GAAP net income grew 134% from the year-ago value to $903 million. Moreover, its adjusted EBITDA increased 57% year-over-year to $1.85 billion over this period.
A consensus EPS estimate of $4.11 for fiscal 2021 represents an 83.5% increase year-over-year. TSLA beat the Street’s EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $48.11 billion for the current year represents a 52.6% increase from the same period last year. The stock has gained 518.8% over the past year.
New Street Research analyst Pierre Ferragu rated the stock a “Buy” last week. Also, his consensus price target of $900 indicates a potential upside of 29.7%.
Fisker Inc. (FSR)
Headquartered in Manhattan Beach, California, FSR is a designer and manufacturer of eco-friendly electric vehicles and advanced mobility solutions. The company is currently developing a mass-market electric vehicle SUV called the Fisker Ocean.
This month, FSR exceeded 14,000 reservations for its Fisker Ocean SUV, bolstered by orders from the global fleet market. The company signed its first fleet order for 300 vehicles with Viggo, a Danish ride-hailing service. FSR also recently entered an MOU with Foxconn to develop Project PEAR, a breakthrough electric vehicle.
In the fourth quarter, ended December 31, 2020, the company generated cash and cash equivalents of $991.2 million. Its net cash provided by financing activities was $976.7 million and its net cash used in operating activities totaled $30.1 million over this period.
A consensus EPS estimate for fiscal 2022 indicates a 23.4% improvement year-over-year. Also, the stock has gained 57% year-to-date.
Wolfe Research analyst Shreyas Patil recently upgraded the stock to Peer Perform from Underperform. Of eight Wall Street analysts that provided ratings for the stock, five have rated it “Buy.” Also, the consensus price target of $30 represents a potential upside of 30.4%.
Nikola Corporation (NKLA)
Founded in 2015, NKLA is a designer and manufacturer of battery-electric and hydrogen-electric vehicles. The company operates as an integrated zero-emissions transportation systems provider and develops electric vehicle solutions for military and outdoor recreational applications.
Last month, NKLA plans to introduce a FCEV variant of the Nikola Tre Cabover and Nikola Two FCEV Sleeper, targeting best-in-class efficiency for ranges between 300-900 miles in the North American market. Its diversified portfolio of zero-emission commercial vehicles should boost the company’s growth over the long term.
Also last month, Antonio Ruiz, the company’s Director of Fuel Cell Vehicle Code and Standards, was appointed to lead a three-year global standardization project for hydrogen fueling technologies for the International Standardization Organization’s Technical Committee 197. This should accelerate the adoption of heavy-duty fuel-cell electric trucks and help NKLA to advance in hydrogen and fuel-cell technologies.
NKLA’s research and development expenses rose 196.4% year-over-year to $67.52 million in the fourth quarter ended December 31. The company’s depreciation and amortization rose 43.8% from the year-ago value to $1.75 million over this period.
A consensus EPS estimate for fiscal 2022 represents a 7.8% increase year-over-year. The consensus revenue estimate of $267.32 million for the next year represents a 1143.3% increase from the same period last year. The stock has gained 11.5% year-to-date.
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TSLA shares were trading at $705.26 per share on Monday morning, up $11.53 (+1.66%). Year-to-date, TSLA has declined -0.06%, versus a 5.26% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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