The year 2020 saw unprecedented investor interest in the electric vehicle (EV) industry as governments worldwide announced or implemented initiatives to address the climate change concerns. The future of the global EV market looks promising with massive opportunities for growth in the battery, hybrid, and plug-in-hybrid EV markets. According to Globe Newswire, the global EV market is expected to grow at a 29% CAGR from 2021- 2026.
However, EV production costs are increasing because the world is currently witnessing a global semiconductor shortage. This, along with stock price overvaluation, is motivating investors to rotate drop EV stocks in favor of relatively cheaper cyclical stocks amid the economic recovery. This activity is evidenced by the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 4.1% gains over the past three months versus the SPDR S&P 500 ETF Trust’s (SPY) 12.8% returns.
So, it’s wise to stay away from fundamentally weak EV stocks ChargePoint Holdings, Inc. (CHPT), Hyllion Holdings Corp. (HYLN), and XL Fleet Corp. (XL).
Click here to checkout our Electric Vehicle Industry Report for 2021
ChargePoint Holdings, Inc. (CHPT)
CHPT develops and markets networked electric vehicle (EV) charging system infrastructure and cloud-based services. The company offers a portfolio of hardware, software, and services for commercial, fleet, and residential customers.
For its fiscal year 2021 fourth quarter, ended January 31, 2021, CHPT’s revenue was $42.39 million compared to $43.24 million in the prior-year period. Furthermore, , its operating loss for the quarter was $35.32 million and its net loss came in at $90.75 million. The company’s loss per share came in at $5.29.
Analysts expect its EPS to remain negative in fiscal 2022 and fiscal 2023. The stock has lost 45.1% since hitting its $49.48 all-time high on December 24. It closed Friday’s trading session at $25.32.
CHPT’s poor prospects are apparent in its POWR Ratings. The stock has an overall F rating, which equates to Strong Sell in our proprietary rating system. It has an F grade for Value, and a D grade for Growth, Stability, and Quality. Click here to see the additional POWR ratings for CHPT (Momentum and Sentiment).
CHPT is ranked #83 of 89 stocks in the Industrial-Equipment industry.
Hyllion Holdings Corp. (HYLN)
HYLN designs, develops, and sells electrified powertrain solutions for the commercial transportation industry. It also provides battery management systems for hybrid and fully electric vehicle applications. Its Hypertruck ERX system are traditional diesel or natural gas fueled powertrains.
The company’s net revenues declined 91.7% year-over-year to $5.86 million for the fourth quarter ended December 31, 2020. Its loss from operations came in at $10.34 million, while its net loss was $20.52 million. HYLN’s net loss per share came in at $0.13 for the quarter.
HYLN’s EPS is expected to decline 192.9% year-over-year in fiscal year 2021. The stock has lost 37.2% over the past three months to close Friday’s trading session at $10.43.
HYLN’s POWR Ratings are consistent with this bleak outlook. The stock has an overall F rating, which equates to Strong Sell in our proprietary rating system. The stock has an F grade for Growth and Value, and a D grade for Stability and Sentiment. Click here to see HYLN’s ratings for Momentum and Quality as well.
HYLN is ranked #22 of 22-stocks in the Trucking Freight industry.
XL Fleet Corp. (XL)
XL is a provider of vehicle electrification solutions for commercial and municipal fleets. The company’s offerings include XLP plug-in hybrid electric and XLH hybrid electric upfit solutions. It offers its solutions for the customers of Ford Motor Company (F), Chevrolet, GMC and Isuzu Motors Limited (ISUZY).
The company’s operating expense increased 112% year-over-year to $5.30 million for the fourth quarter, ended December 31, 2020. Its operating loss for the quarter was $1.20 million. Its net loss came in at $5.60 million compared to $3.76 million in the prior-year period, and its loss per share came in at $0.06.
A securities class action lawsuit has been filed against XL on behalf of investors who purchased or otherwise acquired its securities between October 2, 2020 and March 2, 2021. It is alleged that throughout the period the company issued materially false and/or misleading statements and/or failed to disclose several necessary facts. The company’s EPS is expected to remain negative in its fiscal year 2021 and fiscal 2022. The stock has lost 22.9% over the past month and closed Friday’s trading session at $6.80.
XL has an overall F rating, which translates to Strong Sell in our proprietary rating system. It also has an F grade for Quality, Value, and Stability along with a D grade for Growth and Sentiment. Click here to see XL’s rating for Momentum as well.
XL is ranked #66 of 67 stocks in the Auto Parts industry.
Click here to checkout our Electric Vehicle Industry Report for 2021
CHPT shares were trading at $23.71 per share on Monday afternoon, down $1.61 (-6.36%). Year-to-date, CHPT has declined -40.84%, versus a 12.31% rise in the benchmark S&P 500 index during the same period.
About the Author: Ananyo Guha Niyogi
Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand.
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