After the recent COP28 meeting yielded a historic agreement to begin phasing out fossil fuels, it's worth taking a look at some opportunities in the electric vehicle (EV) space. While the industry has struggled in 2023 amid sluggish demand and an ongoing price war that has dented the margins of even mega-cap Tesla (TSLA), there's substantial opportunity for growth in the years ahead.
Specifically, the International Energy Agency (IEA) expects EV adoption to wipe out 5 million barrels per day of oil demand by the end of this decade, and the EV industry is expected to expand at a CAGR of 15.9% through 2035, to reach 51.6 million vehicles sold. The Inflation Reduction Act in the US has seen more than $100 billion in investment in the EV sector.
Against this backdrop, here's a look at one low-priced EV stock that has major upside potential, according to Wall Street analysts.
GreenPower Motor Company (GP) is a Vancouver-based micro-cap that designs, manufactures, and markets electric vehicles for the commercial market in the U.S. and Canada. They provide EVs for delivery, schools, vanpools, shuttles, public transit, cargo transportation, and more.
Notably, with GP's operational facilities based out of Southern California, that state recently joined four others in mandating a transition to all-electric school buses. More recently, the company has started production out of a West Virginia facility.
GreenPower stock has been a standout in 2023, up 82% YTD. Valued at a market cap of $77.6 million, the shares currently trade just above $3.
GreenPower’s recent fiscal Q2 earnings report fell short of analysts' expectations on both the top and bottom line, but there were some bright spots in the results. Revenue increased 9.1% year over year to $8.4 million as the company delivered a record 16 school buses, and cash increased by $1.4 million to $2 million compared to the beginning of the fiscal year.
Analysts expect GreenPower to move steadily closer to profitability in the months ahead. Losses are expected to narrow to $0.09 per diluted share in the current quarter, followed by a loss of $0.05 per diluted share in the March quarter.
Analysts have high hopes for GP stock, with four analysts giving it an average rating of “Strong Buy." The average price target is $6.00, which implies expected upside of roughly 90% from current levels.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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