Electric vehicle (EV) sales have been rising dramatically over the past few years, driven by sustained demand. The demand for EVs is growing at a fast pace owing to the skyrocketing gas prices, increased concerns regarding climate change, and federal tax incentives. A supply and demand imbalance, Russia’s invasion of Ukraine, and financial sanctions by the United States and its allies on Russia have shaken the global energy market and driven a surge in gasoline prices.
According to a report by Meticulous Research, the EV market is projected to grow at a 33.6% CAGR to $2.50 trillion by 2027. The government has increased its expenditure on developing charging infrastructure and incentives to support the EV industry and to achieve sustainability goals. The landmark $1.2 trillion b-partisan infrastructure bill passed last fall has also earmarked substantial funding to develop the domestic EV industry.
Given this backdrop, Wall Street analysts expect quality under-the-radar EV stocks Enovix Corporation (ENVX) and Tritium DCFC Limited (DCFC) to gain substantially in price in the coming months.
Click here to checkout our Electric Vehicle Industry Report for 2022
Enovix Corporation (ENVX)
ENVX in Fremont, Calif., designs, develops, markets, and manufactures silicon anode lithium-ion batteries. The company produces custom three-dimensional silicon lithium-ion batteries for mobile computing and communication device applications. Its products include EX-1, which develops batteries for mobile communication devices with energy densities. ENVS is developing its technology with automobile manufacturers for the EV market.
Last December, ENVX updated its EV program at the 21st Advanced Automotive Battery Conference at the San Diego Convention Center. The presentation included promising early battery performance from its U.S. Department of Energy (DOE) program, improved energy density over EV solutions, and fast charge capability.
In its fiscal 2021 fourth quarter, ended Jan. 2, 2022, ENVX's cash and cash equivalents increased 1,222.1% year-over-year to come in at $385.29 million. ENVX’s total current assets grew 79.9% year-over-year to $398.12 million, ended Jan. 2, 2022.
The $147.40 million consensus revenue estimate for its fiscal year 2022, ending Dec. 31, 2022, represents 1,552.5% year-over-year growth.
ENVX’s stock has declined 46.8% in price year-to-date and 44% over the past three months. However, the 12-month median analyst price target of $41.00 indicates a 182.4% potential upside from yesterday’s closing price of $14.52. All four Wall Street analysts that rated ENVX rated it Buy. The price targets range from a low of $29.00 to a high of $65.00.
Tritium DCFC Limited (DCFC)
DCFC designs, manufactures, and supplies DC chargers for electric vehicles (EVs) in the U.S., Europe, Australia, and internationally. It is headquartered in Murarrie, Australia. In addition, the company offers CAN-Ethernet products that allow access to the vehicle CAN bus from a PC application.
On Feb. 15, 2022, DCFC partnered with Wise EV, a subsidiary renewable energy service provider Wise Power, to provide fast chargers for the new U.S. EV charging network. The charging network is expected to start with 25 locations throughout Florida. The partnership might expand the company’s business and boost its revenue streams.
On Feb. 8, 2022, DCFC unveiled a new manufacturing facility in Lebanon, Tenn. The facility is expected to increase DCFC’s sales, localize production, and expand EV charging infrastructure in the U.S.
DCFC went public through a reverse merger with special purpose acquisition company Decarbonization Plus Acquisition Corporation II on January 14. The capital raised from this deal is expected to allow DCFC to boost its growth and fund its business operations. Also, DCFC’s position as a global leader in DC fast chargers for EVs is strengthened as a public company.
Analysts expect DCFC's revenue for its fiscal year 2022 to be $171.25 million, representing a 115.1% rise year-over-year.
DCFC stock has plunged 24.3% in price year-to-date and 23.7% over the past three months. However, the 12-month median analyst price target of $14.33 indicates an 89.8% potential upside from yesterday’s closing price of $7.55. All three Wall Street analysts that rated DCFC rated it Buy. The price targets range from a low of $10.00 to a high of $17.00.
Click here to checkout our Electric Vehicle Industry Report for 2022
ENVX shares were trading at $14.63 per share on Friday morning, up $0.11 (+0.76%). Year-to-date, ENVX has declined -46.37%, versus a -7.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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