Electric vehicles (EVs) are expected to dominate the future automotive market, thanks to favorable government policies worldwide amid growing climate change concerns and rising crude oil prices. As a result, the demand for EV charging solutions is also expected to increase tremendously. Also, President Biden recently announced the deployment of half-million U.S.-made electric-vehicle charging stations across the country.
However, with supply chains deteriorating each day due to the Russia-Ukraine war, shortages of raw materials such as steel and aluminum remain a significant hurdle for the EV charging sector. Thus, though the industry possesses solid long-term growth prospects, fundamentally weak and overvalued EV charging stocks might witness a price retreat in the near term.
EV charging stocks EVgo, Inc. (EVGO), Volta Inc. (VLTA), ADS-TEC Energy PLC (ADSE), and Nuvve Holding Corp. (NVVE) look significantly overvalued at their current price levels. So, we think it could be wise to avoid these stocks now.
Click here to checkout our Electric Vehicle Industry Report for 2022
EVgo, Inc. (EVGO)
EVGO in Los Angeles owns and operates a direct current fast-charging network for battery electric vehicles in the United States. Currently, it has approximately 800 direct current fast charging (DCFC) locations in approximately 68 metropolitan areas across 35 states.
EVGO’s total revenue increased 73% year-over-year to $6.18 million for the third quarter, ended Sept. 30, 2021. However, its operating loss came in at $25.93 million, up 99.2% year-over-year. Also, its total operating expenses increased 131.9% year-over-year to $24.28 million. The company’s total liabilities came in at $130.81 million for the period ended Sept. 30, 2021, compared to $92.65 million for the period ended Dec. 31, 2020.
In terms of forward EV/S, EVGO’s 89.59x is 7,537.5% higher than the 1.17x industry average. Furthermore, its 38.63x forward P/S is also 4,155.3% higher than the 0.91x industry average.
Analysts expect EVGO’s EPS to remain negative in its fiscal year 2022. Its EPS is estimated to decrease 57.1% in 2022. The stock has declined 18.9% in price over the past nine months to close yesterday’s trading session at $11.09.
EVGO’s POWR Ratings reflect its poor prospects. It has an overall grade of F, which indicates a Strong Sell. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an F grade for Value and Stability and a D grade for Growth and Quality. Click here to access the additional POWR Ratings for EVGO (Momentum and Sentiment). EVGO is ranked #86 of 92 stocks in the Industrial - Equipment industry.
Click here to check out our Industrial Sector Report for 2022
Volta Inc. (VLTA)
San Francisco-based VLTA operates a network of smart media-enabled charging stations for electric vehicles in the United States. The company has installed approximately 1,900 chargers across 26 territories and states.
VLTA’s total revenues increased 77.1% year-over-year to $8.49 million for the third quarter, ended Sept. 30, 2021. However, its product revenue decreased 50.5% year-over-year to $372,000. The company’s loss from operations came in at $29.67 million, up 155.2% year-over-year, while its net loss was $43.05 million, up 196.5% year-over-year.
The stock currently has an EV/EBITDA of negative 14.16x versus the 0.46x industry average.
Analysts expect VLTA’s EPS to remain negative in its fiscal year 2022. Over the past month, the stock has declined 22.1% to close yesterday’s trading session at $4.03.
VLTA has an overall F grade, which equates to a Strong Sell in our proprietary rating system. In addition, it has an F grade for Value, Stability, and Quality and a D grade for Sentiment.
We have also rated it for Growth and Momentum. Click here to access all the VLTA ratings. VLTA is ranked #80 in the Industrial - Equipment industry.
ADS-TEC Energy PLC (ADSE)
Based in Dublin, Ireland, ADSE, a global B2B technology company, develops, manufactures, and services intelligent battery buffered energy systems. Its applications are manifold in mobility, industry, commerce, infrastructure, and residential.
In terms of forward EV/Sales, ADSE’s 9.09x is higher than the 1.71x industry average. Also, its 8.90x forward P/S is 532.6% higher than the 1.41x industry average.
Analysts expect ADSE’s EPS to remain negative in its fiscal year 2022. Over the past month, the stock has declined 9% to close yesterday’s trading session at $7.70.
ADSE’s POWR Ratings are consistent with this bleak outlook. The stock has an overall D rating, which equates to a Sell in our proprietary rating system. In addition, the stock has a D grade for Growth, Value, Momentum, and Quality.
We also have graded ADSE for Stability and Sentiment. Click here to access all of ADSE’s ratings. It is ranked #77 in the Industrial - Equipment industry.
Nuvve Holding Corp. (NVVE)
NVVE, a green energy technology company that is based in San Diego, Calif., develops and commercializes vehicle-to-grid (V2G) technology in North America, Europe, and Japan. It offers fleet and electric bus charging solutions and V1G and V2G charging stations based on GIVe, a V2G technology platform.
On March 4, 2022, NVVE and Swell Energy Inc. forged a strategic collaboration to advance opportunities for electric vehicle participation in Swell's virtual power plant network. However, given the company’s inconsistent financials, this partnership might not yield immediate profits.
NVVE’s total revenue decreased 13.3% year-over-year to $1.16 million for the third quarter, ended Sept. 30, 2021. Its net loss came in at $6.98 million, up 791.9% year-over-year, while its loss per share came in at $0.37, up 311.1% year-over-year.
In terms of forward EV/S, NVVE’s 13.88x is significantly higher than the1.71x industry average. Furthermore, its 19.57x forward P/S is higher than the industry average of 1.41x.
NVVE’s EPS is expected to remain negative in its fiscal year 2022. It has missed EPS estimates in the last three quarters. Also, the stock has declined 5.1%in price over the past month, to close yesterday’s trading session at $6.31.
NVVE has an overall grade of D, which indicates a Sell. Also, the stock has a D grade for Growth, Value, Stability, Sentiment, and Quality.
Click here to access the additional POWR Ratings for NVVE (Momentum). NVVE is ranked #60 of 69 stocks in the Auto Parts industry.
Click here to checkout our Electric Vehicle Industry Report for 2022
EVGO shares fell $0.35 (-3.16%) in premarket trading Tuesday. Year-to-date, EVGO has gained 8.05%, versus a -11.71% 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.
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