Speculative investors are willing to invest in stocks that many investors would steer clear from. That’s been the case with EV charging stocks. The sector has been beaten down alongside electric vehicle stocks.
The electric vehicle (EV) transition is underway. But it’s taking longer than some consumers want and many investors expected. However, at least one reason is not hard to understand. The EV charging infrastructure isn’t built out. That may surprise those that live in major metropolitan areas. But move further out and you’ll see why the words “range anxiety” exist.
But that’s where the opportunity lies. And it’s why speculative investors should look at EV charging stocks. The Biden administration may back away from its tailpipe emissions standards that would have forced automakers to derive a high volume of their inventory from battery electric vehicles (BEVs). But in my opinion, that’s only settling the order of the chicken and egg argument.
The charging infrastructure needs to expand and two important developments make that more likely. First, in 2023 many EV makers adopted the North American Charging Standard (NACS), that is the Tesla (NASDAQ:TSLA) standard. Second, many EV makers have formed a joint-venture EV charging network that will accelerate the expansion of DC fast-charging stations across North America.
In summary, the best may be yet to come for EV stocks. But for now at least investors may want to focus on EV charging stocks. Here are three to consider.
Beam Global (BEEM)
Beam Global (NASDAQ:BEEM) is a pioneer in delivering off-grid EV charging solutions. The company’s lead products are its EV ARC and Solar Tree solar-powered EV charging solutions. These are transportable, but permanent stations that reduce the dependence on an aging electric grid.
This gives the company a huge addressable market. In 2024, the company has landed a series of government contracts. That should hearten investors who watched the company grow its top line at an impressive pace last year as it moved closer to profitability.
Beam is targeting profitability to occur in 2024. And analysts are ramping up their price targets in anticipation. The consensus price target from six analysts is $21.17, a 198% increase from the stock’s current price. And, five out of seven analysts have a Strong Buy rating on the stock.
With a market cap of just under $99 million, this is a tiny company and short interest is around 11%. But that will only add fuel to BEEM stock if it delivers the kind of revenue growth that analysts expect.
EVgo (EVGO)
EVgo (NASDAQ:EVGO) is another one of the EV charging stocks that analysts are bidding higher in 2024. Analysts have a $6.69 consensus price target which is 168% higher than the EVGO stock closing price on Feb. 20.
When the company reported third-quarter earnings in November, it announced a deal that would have it building 32 of its fast-charging stations in Colorado and Pennsylvania. Investors will also want to pay attention to the recent announcement from the U.S. Transportation Department that it will award $148.8 million to replace nearly 4,500 existing electric vehicle ports as part of the National Electric Vehicle Infrastructure (NEVI) program.
There is some concern about a lower ceiling for the company because it directly competes with Tesla. But, for now, there seems to be a large enough pie to go around. A larger concern may be the company’s balance sheet which continues to show negative cash flow from operations.
However, for now that’s the risk versus reward nature of this growing sector and why EVgo is on this list of potential multibaggers in the space.
ChargePoint (CHPT)
Several years ago, ChargePoint (NYSE:CHPT) would have seemed like a shining star amidst EV charging stocks. But revenue growth seems to be slowing, if not outright reversing. And as it does, the company’s negative earnings per share are expanding.
That’s an ugly combination, and it’s reflected in the company’s stock chart. CHPT stock is down 83% in the last 12 months. And with short interest around 25%, the trade would seem to be to short the stock.
But if you’re looking for multibagger stocks, you’re playing a long game. And that’s where the story for ChargePoint looks much better. The company has benefited from government stimulus. That may be tough to come by as the U.S. Congress is firmly in gridlock.
But elections bring clarity, as well as likely interest rate cuts. Both will benefit ChargePoint and that’s why this is a good stock for investors to scale into. No matter what the outcome of the election, you may be glad that you did.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
