The demand for electric vehicle (EV) batteries continues to grow with the increasing shift toward EVs backed by favorable government policies. Therefore, Wall Street analysts expect electric vehicle battery stocks FREYR Battery (FREY), Romeo Power (RMO), and Flux Power (FLUX) to rally significantly in the near term.
The demand for electric vehicle (EV) batteries is projected to expand at a rapid rate over the next decade. In addition, governments worldwide have been taking various measures to push for better EV infrastructure. For example, the Biden administration has proposed a $7.5 billion investment in EV infrastructure.
Investors’ interest in the electric vehicle battery stocks is evident from the Global X Lithium & Battery Tech ETF’s (LIT) 8.4% returns over the past three months versus the SPDR S&P 500 ETF Trust’s (SPY) 1% gains. Moreover, according to an Expresswire report, the EV battery market is expected to grow at an 18% CAGR to $37.69 billion between 2021 and 2025.
Given this backdrop, Wall Street analysts expect electric vehicle battery stocks FREYR Battery (FREY), Romeo Power, Inc. (RMO), and Flux Power Holdings, Inc. (FLUX) to rally more than 70% in the upcoming months. So, it could be wise to add these stocks to your watchlist.
FREYR Battery (FREY)
Based in Luxembourg, FREY produces and sells battery cells for stationary energy storage, electric mobility, and marine applications internationally. It also designs and manufactures lithium-ion-based battery cell facilities.
On August 12, 2021, Tom Jensen, the CEO of FREY, said, “The NYSE listing is a critical milestone that supports FREYR’s long-term ambition to decarbonize transport and energy systems by delivering sustainable and cost-effective batteries to energy storage systems (ESS), electric vehicles and other applications, thereby generating returns for our shareholders and stakeholders.”
FREY’s other income came in at $2.32 million, up 905.2% year-over-year for the second quarter ended June 30, 2021. The company’s total liabilities and shareholders’ equity (deficit) came in at $14.26 million for the period ended June 30, 2021, compared to $15.93 million for the period ended December 31, 2020. Its cash, cash equivalents, and restricted cash came in at $12.08 million, up 633.6% year-over-year for the six months ended June 30, 2021.
Over the past month, the stock has gained 6.8% to close yesterday’s trading session at $9.61. Wall Street analysts expect the stock to hit $19 in the near term, which indicates a potential upside of 97.7%.
Romeo Power, Inc. (RMO)
RMO is an energy storage technology company, which designs and manufactures lithium-ion battery modules and packs for commercial electric vehicles in North America. The company operates through two segments: Romeo Power North America and Joint Venture Support.
On September 14, 2021, RMO collaborated with Dynexus Technology to introduce Advanced Battery Sensing and Diagnostics for battery-electric commercial vehicles. AK Srouji, CTO of RMO, said, “Dynexus generates critical data that can accelerate the qualification process of cells and batteries, including cell screening and matching, further improving quality control, safety, and reliability of our battery systems.”
RMO’s product revenues increased 1.7% year-over-year to $466,000 in the second quarter ended June 30, 2021. Its total liabilities came in at $40.77 million for the period ended June 30, 2021, compared to $160.34 million for the period ended December 31, 2020. In addition, its net income came in at $61.34 million for the six months ended June 30, 2021, compared to a loss of $13.79 in the year-ago period. Also, its total cash, cash equivalents, and restricted cash came in at $45.55 million for six months ended June 30, 2021, up 563.6% year-over-year.
Analysts expect RMO’s revenue to grow 398.6% year-over-year to $102.07 million in fiscal 2022. Moreover, its EPS is expected to grow 72.2% year-over-year in the current year. The stock has lost 9.9% over the past month to close yesterday’s trading session at $4.67. However, Wall Street analysts expect the stock to hit $8.00 in the near term, which indicates a potential upside of 71.3%.
Flux Power Holdings, Inc. (FLUX)
Through its subsidiary Flux Power, Inc., FLUX designs, develops, manufactures, and sells lithium-ion energy storage solutions for lift trucks, airport ground support equipment, and other industrial and commercial applications in the United States.
On July 30, 2021, FLUX announced its shipment of over 10,000 battery packs to customers. The company’s CEO, Ron Dutt, said, “We believe these 10,000+ battery packs are a testament to the contributions of our employees and the customer demand for innovative and safe lithium-ion solutions.”
For the fiscal fourth quarter ended June 30, 2021, FLUX’s net revenue increased 33.1% year-over-year to $8.33 million. The company’s gross profit came in at $1.75 million, up 59.9% year-over-year. Its gross margin increased to 21% compared to 17.5% in the year-ago period.
FLUX’s revenue is expected to come in at $55.81 million in fiscal 2023, representing a 56.1% year-over-year rise. The company’s EPS is expected to increase by 43.3% in the next year. Over the past month, the stock has lost 32.8% to close yesterday’s trading session at $5.42. However, Wall Street analysts expect the stock to hit $13.67 in the near term, which indicates a potential upside of 152.2%.
FREY shares were trading at $9.68 per share on Friday morning, up $0.07 (+0.73%). Year-to-date, FREY has gained 2.43%, versus a 18.47% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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