Jon Wolfenbarger, a 32-year market veteran warns that despite the seemingly booming U.S. labor market, there are underlying weaknesses that suggest an imminent recession. While the headline numbers show strong job growth and historically low unemployment rates, Wolfenbarger points out that the kind of jobs being added and other economic indicators paint a bleaker picture. This could be a boon for the EV charging stocks to buy in this article, as investors can scoop them up at rock bottom valuations.
Wolfenbarger also cites the Conference Board’s Leading Economic Index, which has a perfect track record of identifying recessions, as a signal of an impending downturn. The index takes into account various variables such as bond and stock market activity, manufacturing activity, consumer confidence, and lending activity.
These EV charging stocks to buy could then enter into attractive buying zones moving forward. So here are seven of these companies to consider.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT) provides one of the largest electric vehicle charging networks worldwide. Its comprehensive solutions range from hardware to software, offering a complete package for charging infrastructure.
The bull case for CHPT at present rests on its recent significant drop in share price, which has led to a relatively low price-to-sales (P/S) ratio of 1.1x, compared to industry peers. Despite its sluggish revenue growth, ChargePoint has shown impressive revenue increases over the past few years, and analysts expect a continued but slower growth trajectory.
CHPT’s valuation could significantly improve in light of a stock market crash, and its other fundamentals position it for significant outperformance in the future. Additionally, CHPT has a net cash position of $56.76 million, but its Altman Z-Score of -2.04 suggests an increased risk of bankruptcy, so a lower valuation may be needed to justify this risk.
Blink Charging (BLNK)
Blink Charging (NASDAQ:BLNK) specializes in providing EV charging stations across various locations, including residential, commercial, and public spaces.
BLNK’s bull case is buoyed with fourth-quarter revenue reaching $42.71 million, marking an 88.9% increase year-over-year. Notably, the company outperformed expectations in several key revenue categories, including product sales, charging service revenue, car-sharing services and others.
BLNK aims to expand its charging network by deploying more charging stations across various locations, including residential, commercial, and public spaces, to meet the growing demand for electric vehicles.
With a P/S ratio of 1.74 and a forward P/S ratio of 1.40, the stock is valued relatively attractively based on its revenue generation. However it recorded substantial losses amounting to $203.69 million over the last twelve months.
Like with CHPT, BLNK’s bull case would be significantly bolstered upon a reduction in its share price, which reflects the risks involved in its core business.
EVgo (EVGO)
EVgo (NASDAQ:EVGO) is a prominent EV charging company, focusing on rapid charging solutions. They operate and maintain a wide network of charging stations across the United States.
The company reported a significant increase in revenue in Q4 2023, demonstrating steady growth compared to the same quarter the previous year. For 2024, EVGO projects further expansion of its charging infrastructure, aiming to address the growing demand for EV charging solutions.
In terms of operations, EVGO achieved record network throughput, reaching 130 GWh in 2023, marking a 189% increase compared to 2022. The company also reported significant growth in its network, with over 3,500 charging stalls operational or under construction by the end of the year.
For 2024, EVGO has introduced financial guidance that reflects a positive trajectory. It projects total revenue in the range of $220 to $270 million, coupled with an adjusted EBITDA of negative $48 million to negative $30 million.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is a leader in the electric vehicle industry, and their proprietary Supercharger network offers rapid charging solutions for Tesla vehicles globally.
TSLA reported Q1 2024 results showing revenues of $23.5 billion, up from $20.2 billion year-on-year, attributed primarily to vehicle sales and growth in the energy segment. Gross margins declined slightly to 18.4%, reflecting increased cost pressures. The company delivered 445,000 vehicles in Q1, up 36% year-on-year, supporting continued growth.
The trailing PE ratio of 42.93 and forward PE ratio of 55.56 for TSLA indicate a relatively high valuation compared to traditional benchmarks. This suggests the market anticipates significant future growth.
However, with significant competition arising from developing markets, particularly in China offering lower-priced alternatives such as Nio (NYSE:NIO) are a threat to its growth model. A correction TSLA’s share price could help alleviate some of those concerns.
Nuvve (NVVE)
Nuvve (NASDAQ:NVVE) offers a unique vehicle-to-grid (V2G) solution, allowing electric vehicles to interact with the grid.
NVVE reported substantial year-over-year growth in Q4 2023, with an annual revenue of $8 million. This reflects strong momentum in both orders and sales, which is expected to continue into 2024.
NVVE’s expansion of its V2G platform, GIVe, has led to a significant increase in connected charging stations. In Q4 2023 alone, 108 new chargers were added to the network, contributing to additional grid service revenues.
Revenues for the past year totaled $8.33 million, but net losses amounted to $32.22 million, leading to a loss per share of -$40.36. The company has a debt-to-equity ratio of 0.74, indicating moderate leverage. Its stock performance has been volatile, with a 52-week decline of 96.72%. Additionally, the company’s Altman Z-Score stands at -13.98, hinting at potential financial distress.
NVVE is then in penny stock territory, but I believe that it can do much better for investors by being priced even lower than it is already.
Tritium DCFC (DCFC)
Tritium DCFC (NASDAQ:DCFC) provides rapid charging solutions for electric vehicles. Now might be a good time for investors to consider adding DCFC to their portfolios if a market downturn comes to fruition.
The company outlined strategic steps for its profitability and growth in 2024. Key initiatives include restructuring its business operations, closing its Brisbane factory, and consolidating manufacturing in Tennessee. This move aims to optimize the company’s market position and streamline operations to achieve EBITDA positivity in the first half of 2024.
Additionally, Tritium has secured substantial investments and orders, including a $40 million capital injection from longstanding investors and a 300-charger purchase order from OK, Denmark’s largest fuel retailer.
In terms of valuation ratios, DCFC has a P/S ratio of 0.02, indicating a low valuation relative to its sales. However, the company’s financial position seems concerning, with a negative current ratio of 0.92 and high debt levels.
ABB (ABB)
ABB’s (NYSE:ABB) charging solutions include both AC and DC chargers, ranging from home to commercial applications.
Operational EBITA increased by 13% to $1.39 billion in Q3 last year, achieving an EBITA margin of 17.4%, an increase of 80 basis points from Q3 2022. The company’s focus on cash conversion led to an increase in cash flow from operating activities, which stood at $1.4 billion, supported by improved net working capital management
ABB has provided an outlook for 2024 that emphasizes growth in its electric vehicle charging solutions, including both AC and DC chargers. The company reported a 12% increase in order intake in the third quarter of 2023 compared to the same period in 2022. ABB’s focus remains on expanding its market presence and developing new products.
Things then look like they are progressing well for ABB, and its valuation can get a significant discount in the event of a market downturn.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.