The electric vehicle (EV) industry has immense growth potential because the world is gradually moving toward zero-emissions transportation. And investors’ interest in the EV space is evident in the Global X Autonomous & Electric Vehicles ETFs’ (DRIV) 101.8% returns over the past year versus the tech-heavy Nasdaq's 47.1% returns.
The growth of the EV industry is making the prospects bright for ancillary EV companies also. For example, because most EVs rely on lithium-ion batteries for power, companies involved in producing these batteries are well positioned to grow.
Given this industry’s promising prospects, sector analysts are highly optimistic about the near-term performance of QuantumScape Corporation (QS) and Romeo Power, Inc. (RMO). As such, we think it could be wise to scoop up these stocks now.
Click here to checkout our Electric Vehicle Industry Report for 2021
QuantumScape Corporation (QS)
Founded in 2010, QS is a development stage company. It develops and commercializes solid-state lithium-metal batteries for electric vehicles and other applications.
On May 14, QS announced that it had entered an agreement with Volkswagen Group of America, Inc. (VWAGY) to select the location of their joint-venture solid-state battery pilot-line facility by year’s end.
QS’s total assets have increased 51.5% year-over-year to $1.62 billion for the first quarter, ended March 31, 2021. Its total liabilities decreased 55% year-over-year to $320.74 million. The company’s cash, cash equivalents and restricted cash increased 17755.9% year-over-year to $764.53 million.
Analysts expect QS’ EPS to increase 92.2% year-over-year in 2021. The stock closed yesterday’s trading session at $26.92.
Wall Street analysts expect the stock to hit $42 in the near term, which indicates a potential 56% upside.
Romeo Power, Inc. (RMO)
RMO designs and manufactures lithium-ion battery modules and packs for commercial electric vehicles. The company operates through two segments, Romeo Power North America and Joint Venture Support. It offers battery modules, battery packs, and battery management system technologies.
On April 6, RMO announced a long-term supply agreement with PACCAR (PCAR) to provide battery packs, modules and battery management systems (BMS) for PACCAR’s battery electric vehicles (BEVs). The collaboration could increase the company’s sales in the near- to mid-term.
For the first quarter, ended March 31, 2021, RMO’s income before taxes was $90.66 million, compared to a loss before taxes of $6.07 million in the prior year period. Its net income was $90.01 million compared to a $6.77 million net loss in the year-ago period, while its EPS came in at $0.66 compared to a $0.09 loss per share in the prior-year quarter.
Analysts expect RMO’s EPS to increase 118.5% year-over-year to $0.1 in 2021. Its revenue is expected to increase 865.6% year-over-year to $230.3 million in its fiscal year 2022. The stock closed yesterday’s trading session at $8.07.
Wall Street analysts expect the stock to hit $11.68 in the near term, which indicates a potential 44.7% upside.
Click here to checkout our Electric Vehicle Industry Report for 2021
QS shares were trading at $26.10 per share on Thursday afternoon, down $0.82 (-3.05%). Year-to-date, QS has declined -69.09%, versus a 12.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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