The major market indexes suffered a sell-off last week on concerns over deepening supply chain disruptions due to economic sanctions placed on Russia. However, EV stocks Tesla (TSLA) and Workhorse Group (WKHS) rallied last week on soaring crude oil prices. So, let’s discuss these names.
Since the beginning of the year, the benchmark indexes have been extremely volatile due to multi-decade high inflation, looming interest rate hikes, and hostilities between Ukraine and Russia.
The major stock market indexes suffered a sell-off last week as Russia exhibited no interest in de-escalating its attack on Ukraine. The S&P 500 declined 1.4%, while the tech-heavy Nasdaq lost 3.2%. The possible deepening of supply disruptions and rising crude oil prices spooked investors. The benchmark Brent and WTI hit multi-year highs on concerns over economic sanctions on Russia, a major oil and gas exporter. The situation has caused many investors to shift their focus to electric vehicle (EV) stocks in anticipation of heightened demand for EVs. With attractive government policies in place, global EV sales more than doubled in 2021, as reported by the International Energy Agency (IEA). And according to a study by Astute Analytica, the global electric vehicle market is expected to register revenues of $72.79 trillion by 2050, growing at a 21.9% CAGR.
Prominent EV stocks Tesla, Inc. (TSLA) and Workhorse Group Inc. (WKHS) soared last week on investors’ anticipation that demand for electric vehicles will increase amid rising oil and gas prices. So, we think it could be wise to add these stocks to one’s watchlist.
Tesla, Inc. (TSLA)
Famous EV maker TSLA in Austin, Tex., designs, develops, manufactures, sells, and leases EVs and energy generation and storage systems and offers services related to its sustainable energy products. Its automotive products include its Models 3, Y, S, and X, while its energy storage products include Powerwall, Powerpack, and Megapack.
On March 5, 2022, TSLA received a conditional go-ahead for the Gigafactory in Berlin from the state of Brandenburg. The approval is crucial because it comes six months after the Gigafactory was supposed to open last summer. The Gigafactory is crucial for TSLA in its plans to compete with Volkswagen AG (VWAGY).
TSLA’s total revenues for its fiscal year 2021 increased 70.6% year-over-year to $53.82 billion. The company’s net income attributable to common shareholders increased 665.4% year-over-year to $5.51 billion. Also, its EPS was $4.90, representing an increase of 665.6% year-over-year.
Analysts expect TSLA’s EPS and revenue for the quarter ending March 31, 2022, to increase 140.9% and 69.1%, respectively, year-over-year to $2.24 and $17.57 billion. It surpassed the Street’s EPS estimates in each of the trailing four quarters. And over the past week, the stock has gained 3.5% in price to close the last trading session at $838.29.
Workhorse Group Inc. (WKHS)
WKHS in Loveland, Ohio, is a technology company focused on providing solutions to the commercial transportation sector. The company manufactures electric delivery trucks and drone systems. Its products include C-series electric delivery trucks and a package delivery aircraft named HorseFly. It also offers a Metron telematics systems platform, which allows users to track and monitor the performance of their vehicles.
On Aug. 12, 2021, WKHS announced that it had entered a pilot program with the US Department of Agriculture’s Natural Resources Conservation Service to demonstrate its ability to provide small Unmanned Aerial Systems (sUAS) as a service to support NRCS efforts in Mississippi. WKHS’ President-Aerospace John Graber said, “Engaging in this pilot agreement with the NRCS is the first step in expanding our footprint beyond package delivery and the last mile delivery space.”
For its fiscal year 2021, WKHS’ sales, net of returns, and allowances came in at negative $0.85 million, versus $1.39 million in the year-ago period. The company’s cost of sales increased 913.9% year-over-year to $132.49 million. In addition, its net loss was $401.34 million, compared to $69.77 million in net income in the year-ago period. Also, its loss per share was $3.12, compared to an EPS of $0.70 in the year-ago period.
For the quarter ending March 31, 2022, WKHS’ EPS is expected to increase 88.8% year-over-year to $0.11. The company’s revenue for fiscal 2023 is expected to increase 555.5% year-over-year to $123.50 million. Over the past week, the stock has gained 21% in price to close the last trading session at $3.68.
TSLA shares were trading at $839.63 per share on Monday morning, up $1.34 (+0.16%). Year-to-date, TSLA has declined -20.55%, versus a -10.12% rise in the benchmark S&P 500 index during the same period.
Tesla (TSLA) is a part of the Entrepreneur Indexwhich tracks some of the largest publicly traded companies founded and run by entrepreneurs.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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