XL: XL Fleet vs. Hyliion: Which Electric Vehicle Stock is a Better Buy?

Electric vehicle stocks have been on fire in recent months. Just about everyone is familiar with Tesla’s (TSLA) meteoric rise, yet there are several other electric vehicle stocks worthy of your investing dollars even though they don’t receive as much attention from the mainstream media.

Instead of spending hour after hour researching up-and-coming electric vehicle stocks, let me do the work for you. I have sifted through many of the new EV stocks and found two worth looking at.

Below, I provide a look at two electric vehicle stocks with future growth potential: XL Fleet (XL - Get Rating) and Hyliion (HYLN - Get Rating).

A Look at XL

XL is making no secret that it is planning to take on the ever-worsening problem that is climate change. XL makes both hybrid and plug-in powertrains that convert conventional gas-fueled automobiles into hybrids. XL products are used in vehicles made by the likes of General Motors (GM), Ford (F), and Isuzu. XL is a particularly intriguing play as the now Democratic-controlled federal government shifts its attention to preserving the environment.

In short, the beltway’s attitude toward electric vehicles and climate change is about to do a 180 led by President Biden. The bottom line is we are in the early stages of a societal shift away from fossil fuels, and XL stands to benefit.

XL by the Numbers

XL went public through a SPAC this past year, jumped to $32, declined to $20, and has since traded sideways. Such volatility is perfectly normal for a publicly-traded company introduced by way of a SPAC. Though few analysts have studied XL in-depth, those who cover the stock expect it to reach $30, indicating a potential upside of 45%.

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The Scoop on HYLN

HYLN is one of XL’s top competitors. This electric powertrain solutions provider combines its proprietary battery system with software and data analytics to make electric motors and power electronics capable of full integration. The end result is a highly efficient electrified powertrain system. If there is a problem with HYLN, its technology is solely applicable to class 8 commercial vehicles, meaning large trucks are used to haul goods and other cargo across vast distances. Check out HYLN’s 12-month revenue, and you will find it has a net loss of over $17 million.

HYLN’s decline in recent months is somewhat attributable to Nikola’s (NKLA) farce, an EV-maker that appears to be more smoke and mirrors than actual value. However, HYLN has legitimate potential, mainly in making big rigs green and ultimately helping to preserve our fragile environment in the process. It is concerning that HYLN lacks its own factory, though, instead choosing to rely on Dana, an auto industry supplier, for production.

HYLN by the Numbers

HYLN was hyped by seemingly everyone in the stock market media when it first hit the scene. Indeed, HYLN soared into the teens, up to the $20s and all the way above $50 this past summer, only to drop back down to the teens in late October. The stock is currently trading slightly below $20. However, analysts are bullish on HYLN, setting an average price target of $22, indicating a potential 14% upside.

The POWR Ratings

XL and HYLN leave plenty to be desired in terms of the POWR Ratings. XL has D grades in the Peer Grade, Trade Grade, and Buy & Hold Grade components. However, XL has a B grade in the Industry Rank component. Of the 68 publicly traded companies in the Auto Parts industry, XL is ranked 59th.

HYLN is ranked last out of 21 publicly traded companies in the Trucking Freight industry. HYLN has D grades in the Trade Grade, and Peer Grade components along with an F grade in the Buy & Hold Grade component. HYLN has a C grade in the Industry Rank component.

The Verdict

The fact that XL’s technology converts pollutive gas-powered automobiles into hybrids is quite remarkable. This makes it an intriguing company and a potential pick in the future, but based on our POWR Ratings, it may be best to hold off on both for now.

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XL shares were trading at $19.45 per share on Friday morning, up $0.36 (+1.89%). Year-to-date, XL has declined -18.04%, versus a 0.35% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...