Insights

2 Undervalued EV Stocks You Can Buy and Hold for the Next Decade

The electric vehicle (EV) market is evolving fast. With new players and dynamics, there is a lot of uncertainty as to which companies will emerge as long-term winners. So, investors need to largely make their investing decisions based the companies’ growth potential and future strategies.
Let’s discuss two broadly different electric vehicle (EV) companies, each of which looks quite promising right now.

Image source: Getty Images.

Ford
Ford Motor Company (NYSE: F) will start production of its electric F-150 Lightning pickup at its Rouge EV center in Michigan on April 26. The company’s F-Series pickup truck has been America’s best-selling truck for 45 years in a row. Expectedly, Ford received immense interest from potential buyers when it launched an electric version of this model. This just highlights the company’s key strengths — a strong brand recognition and a deep customer loyalty, thanks to its history of delivering quality vehicles to Americans for decades.
Additionally, like most traditional auto stocks, Ford’s stock is trading at a far more attractive valuation than pure-play EV makers.

F PE Ratio data by YCharts
Tesla stock is trading at a price-to-earnings (P/E) ratio of 205. At the other end of the spectrum is Ford’s stock with a P/E of 3. Likewise, Ford’s price-to-sales ratio of 0.4 is one of the lowest among top EV stocks.
Ford is leaving no stone unturned to transform itself into a top EV player. It has divided its business in two separate units, with one focusing exclusively on EVs. The company targets annual production of 2 million EVs by 2026. With decades of automaking experience and a loyal customer base, there is a solid chance of Ford converting its EV ambition into a reality.
Niu Technologies
Chinese electric scooter maker Niu Technologies’ (NASDAQ: NIU) stock has fallen 77% in a year. Valuation concerns have resulted in a significant correction in several EV stocks. After the steep fall, Niu’s stock is trading at a P/E ratio of nearly 20. Its price-to-sales ratio of around 1.2 also compares favorably with other pure-play EV companies.
Niu Technologies has been growing its sales and profits consistently over the past few years.

NIU Revenue (Annual) data by YCharts
In 2021, the electric scooter maker generated profits of $35 million over sales of nearly $574 million.
In the first quarter of 2022, Niu Technologies’ unit sales rose just 9.4% year over year. Though the company’s international sales grew a massive 194%, it was sales in the company’s domestic market that hurt its overall growth rate. Niu’s China sales, which constituted 91% of its total sales, rose just 3% year over year. 
The slower growth in sales in China was attributed to supply chain shortages and disruption caused by COVID-19 outbreaks in China from mid-February. For January and February combined, Niu’s China sales rose 91.6% year over year. 
Overall, Niu Technologies’ revenue and profit growth over the years is impressive. The company should fare well once the latest COVID-related restrictions get lifted in China.
Rekha Khandelwal has no position in any of the stocks mentioned. The Motley Fool owns and recommends Nio Inc. and Tesla. The Motley Fool has a disclosure policy. –

The electric vehicle (EV) market is evolving fast. With new players and dynamics, there is a lot of uncertainty as to which companies will emerge as long-term winners. So, investors need to largely make their investing decisions based the companies’ growth potential and future strategies.

Let’s discuss two broadly different electric vehicle (EV) companies, each of which looks quite promising right now.

Image source: Getty Images.

Ford

Ford Motor Company (NYSE: F) will start production of its electric F-150 Lightning pickup at its Rouge EV center in Michigan on April 26. The company’s F-Series pickup truck has been America’s best-selling truck for 45 years in a row. Expectedly, Ford received immense interest from potential buyers when it launched an electric version of this model. This just highlights the company’s key strengths — a strong brand recognition and a deep customer loyalty, thanks to its history of delivering quality vehicles to Americans for decades.

Additionally, like most traditional auto stocks, Ford’s stock is trading at a far more attractive valuation than pure-play EV makers.

F PE Ratio data by YCharts

Tesla stock is trading at a price-to-earnings (P/E) ratio of 205. At the other end of the spectrum is Ford’s stock with a P/E of 3. Likewise, Ford’s price-to-sales ratio of 0.4 is one of the lowest among top EV stocks.

Ford is leaving no stone unturned to transform itself into a top EV player. It has divided its business in two separate units, with one focusing exclusively on EVs. The company targets annual production of 2 million EVs by 2026. With decades of automaking experience and a loyal customer base, there is a solid chance of Ford converting its EV ambition into a reality.

Niu Technologies

Chinese electric scooter maker Niu Technologies’ (NASDAQ: NIU) stock has fallen 77% in a year. Valuation concerns have resulted in a significant correction in several EV stocks. After the steep fall, Niu’s stock is trading at a P/E ratio of nearly 20. Its price-to-sales ratio of around 1.2 also compares favorably with other pure-play EV companies.

Niu Technologies has been growing its sales and profits consistently over the past few years.

NIU Revenue (Annual) data by YCharts

In 2021, the electric scooter maker generated profits of $35 million over sales of nearly $574 million.

In the first quarter of 2022, Niu Technologies’ unit sales rose just 9.4% year over year. Though the company’s international sales grew a massive 194%, it was sales in the company’s domestic market that hurt its overall growth rate. Niu’s China sales, which constituted 91% of its total sales, rose just 3% year over year. 

The slower growth in sales in China was attributed to supply chain shortages and disruption caused by COVID-19 outbreaks in China from mid-February. For January and February combined, Niu’s China sales rose 91.6% year over year. 

Overall, Niu Technologies’ revenue and profit growth over the years is impressive. The company should fare well once the latest COVID-related restrictions get lifted in China.

Rekha Khandelwal has no position in any of the stocks mentioned. The Motley Fool owns and recommends Nio Inc. and Tesla. The Motley Fool has a disclosure policy.

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