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Workhorse, NIO, Tesla, Nikola, and Tortoise have gained nearly 180% in the past month. Now its shares are trading, on average, 146% above Wall Street’s price targets. When stocks go up like this, they become difficult to value.
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Shares of an electric vehicle maker skyrocket for a second day after better-than-expected delivery numbers were reported Thursday. It raises the question for investors. Are the actions of electric vehicles approaching bubble territory?
No, the shares referenced are not from Tesla (ticker: TSLA). Although Tesla stocks are performing well, they rose 7.7% to more than $ 1,300 in early Monday trading.
The US receipts from Chinese electric vehicle maker NIO (NIO) are the stocks enjoying the two-day rally. NIO ADRs increased more than 24% after increasing nearly 15% on Thursday, the final trading session before the holiday weekend.
NIO management said it delivered 10,331 vehicles in the quarter ended June, exceeding the company’s quarterly guidance. In addition, NIO delivered 3,740 vehicles in June, a monthly record.
This is good news and, as a result, investors have raised ADRs. But the gains are amazing. NIO ADRs are on fire, 108% more in the past month. The Dow Jones Industrial Average, by comparison, rose 1.4% in the same span. The S&P 500 is up 2.4%. Even Tesla’s (TSLA) shares have not kept pace, increasing approximately 47%.
Tesla, which is much larger than NIO, delivered more than 90,000 vehicles in the June quarter. The move in NIO ADR has created nearly $ 8 billion in market value, but the 47% increase in Tesla shares has raised the company’s market value by $ 80 billion.
Investors have had plenty of EV news to digest recently. And they are liking what they are hearing.
In recent weeks, truck maker EV Nikola (NKLA) has been publicly marketed as a result of a merger with a special-purpose acquisition corporation, or SPAC. Nikola also began taking orders on June 29 for his light truck called Badger. Another SPAC, Tortoise Acquisition (SHLL), announced plans to buy heavy duty trucking company EV Hyliion.
There is even the latest news on electric trucks. Lordstown Motor unveiled its Endurance light truck. Workhorse (WKHS) also met safety milestones regarding its electric delivery trucks. (Workhorse has a 10% stake in Lordstown.)
That quintet (Workhorse, NIO, Tesla, Nikola, and Tortoise) has gained nearly 180% in the past month. Amazing. Now its shares are trading, on average, 146% above Wall Street’s price targets.
However, there is a footnote: Tortoise has not yet completed the acquisition of Hyliion. There are no analysts who cover their actions. There are no price targets for Tortoise for investors to reference.
Analysts’ lack of coverage has not yet deterred anyone. EV partnerships are good enough for now.
Investors are betting heavily on an electric transport future (or predominantly). They may be right. Lyft (LYFT), after all, recently announced plans to go all-electric by 2030. That’s another factor that may have catalyzed the recent execution. It is difficult to know. And when stocks go up like this they become difficult to value.
Write to Al Root at [email protected]
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