Despite overwhelming demand, electric vehicle (EV) suppliers have witnessed significant setbacks amid global chip supply bottlenecks. Moreover, EV charging equipment shortages have also been a significant challenge.

Brent Gruber, executive director of global automotive at J.D. Power, said, “Not only is the availability of public charging still an obstacle, but EV owners continue to be faced with charging station equipment that is inoperable.”

In addition, the escalating China-Taiwan conflict might lead to a worsening global chip shortage – a basic requirement for EVs. Taiwan is a major exporter of chips, and an impending war might trigger a neck-deep chip shortage globally.

Given the backdrop, beaten-down and fundamentally weak EV supplier stocks Wolfspeed, Inc. (WOLF), Luminar Technologies, Inc. (LAZR), and EVgo, Inc. (EVGO) might be best avoided this fall.

Wolfspeed, Inc. (WOLF)

WOLF operates as a powerhouse semiconductor company and focuses on silicon carbide and gallium nitride (GaN) technologies in Europe, China, the United States, Japan, South Korea, and internationally.

WOLF’s total long-term liabilities came in at $1.09 billion for the period ended June 26, 2022, compared to $881.50 million for the period ended June 27, 2021. Its other long-term liabilities came in at $55.30 million, compared to $44.50 million for the same period. Also, its total shareholder’s equity came in at $2.44 billion, compared to $2.12 billion in the year-ago period.

WOLF’s EPS is estimated to decline 33.6% per annum for the next five years. Over the past nine months, the stock has lost 5.7% to close the last trading session at $116.90.

WOLF’s POWR Ratings reflect its poor prospects. It has an overall grade of D, which indicates a Sell. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has an F grade for Value and Quality and a D for Stability. Click here to access the additional POWR Ratings for WOLF (Growth, Momentum, and Sentiment). WOLF is ranked #88 out of 95 stocks in the Semiconductor & Wireless Chip industry.

Luminar Technologies, Inc. (LAZR)

LAZR provides sensor technologies and software for passenger cars and commercial trucks in North America, Asia Pacific, Europe, and the Middle East. It has two business segments: Autonomy Solutions and Components.

LAZR’s gross loss came in at $18.16 million for the second quarter ended June 30, 2022, up 1,076.2% year-over-year. Its loss from operations came in at $104.44 million, up 136.3% year-over-year. Moreover, the company’s loss per share was $0.27, up 145.5% year-over-year.

LAZR’s EPS is expected to remain negative in 2022 and 2023. Its EPS is estimated to decline 97.4% year-over-year in 2022 and 92.6% per annum for the next five years. It missed EPS estimates in three of the four trailing quarters. Over the past year, the stock has lost 48.8% to close the last trading session at $8.71.

LAZR’s POWR Ratings are consistent with this bleak outlook. It has an overall rating of Strong Sell and an F grade for Value, Sentiment, Quality, and Stability. Click here to access LARZ ratings for Momentum and Growth. It is ranked last among 66 stocks in the Auto Parts industry.

EVgo, Inc. (EVGO)

EVGO is the owner and operator of a network for direct current fast charging in the United States. The business directly provides electricity to drivers and public charging stations for fleets and ridesharing vehicles and services linked to original equipment manufacturer charging.

EVGO’s operating loss came in at $37.05 million for the second quarter ended June 30, 2022, up 111.1% year-over-year. Its cash from operations came in at negative $38.37 million, compared to a negative $1.36 million in the year-ago period. Moreover, its total current liabilities came in at $63.42 million for the period ended June 30, 2022, compared to $46.87 million for the period ended December 31, 2021.

Street expects EVGO’s EPS to decline 350% year-over-year to a negative $0.15 for the quarter ended December 2022. Its EPS is expected to remain negative in 2022 and 2023. Over the past nine months, the stock has lost 32.7% to close the last trading session at $9.21.

EVGO has an overall F grade, equating to a Strong Sell in our POWR Ratings system. Also, it has an F grade for Stability and a D for Growth, Value, Sentiment, and Quality. Click here to access EVGO rating for Momentum. It is ranked #86 out of 91 stocks in the Industrial – Equipment industry.

WOLF shares were trading at $117.26 per share on Monday afternoon, up $0.36 (+0.31%). Year-to-date, WOLF has gained 4.91%, versus a -14.10% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

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