On the hunt for EV charging stocks? The electric vehicle (EV) market is one of the most promising markets in the industry.
Consumers are transitioning to EVs with the government’s backing, while ESG proponents push for increased adoption. So, investors are taking notice. However, imagine for a moment, little to no gas stations exist. If that were the case, internal combustion engines wouldn’t be popular. And the EV market faces a similar issue: a lack of EV charging infrastructure. It’ll be challenging for EV makers if no infrastructure exists to offer vehicle owners the needed charge on their journey.
As a result, facilities that can provide networks of charging solutions are sorely in need—and investors are looking at EV charging stocks that can provide the necessary infrastructure. So, let’s consider three EV charging stocks with a positive cash flow to buy and hold for the long term.
Shoals Technologies Group, Inc. (SHLS)
Shoals Technologies Group, Inc. (NASDAQ:SHLS) plays a big role in the EV charging market. Its e-mobility solutions help companies solve EV charging market challenges and speed up deployment. Also, the company offers an electrical balance system (EBOS) for EV charging and battery storage. It operates in the solar industry by selling various system solutions. Those include two types of wiring architecture, the “combined as you go” and “homerun,” widely used by the U.S. solar industry.
Shoals Technologies’ results ended with a record 48% year over year (YOY) increase in quarterly revenue, reaching $134.20 million. Awarded orders & backlogs surged by 34% YOY to $633.3 million. Also, adjusted EBITDA saw an 81% increase YOY. Even though gross margins took a $50.2 million hit due to Wire Insulation Shrinkback expenses, the company is optimistic about recovering. In fact, it’s even expanding the capacity of its third Tennessee facility.
SHLS expects adjusted net income to range between $110 million to $120 million for the full year. Shoals’ resiliency makes it one of the high-potential EV charging stocks in the market.
Vontier Corporation (VNT)
If you are looking for a diversified company that offers exposure to EV charging, then Vontier Corporation (NYSE:VNT) is for you. The company offers energy technology, automation, and productivity in a connected ecosystem. It operates through three main segments.
The first one is mobility technologies for its payment, workflow, POS, and software systems for electric vehicle charging networks. Next is the repair solutions segment for its diagnostic equipment and tool boxes. Finally, the environmental & fueling solutions segment offers different after-market solutions, hardware, and software for the global fueling infrastructure.
While VNT may have experienced a 10% YOY decline in sales in FY’23, sales were down 3% YOY to $3.1 billion. Adjusted diluted net EPS came in at $2.89, surpassing the company’s guidance. Also, net cash provided by operating activities has reached $455.0 million in 2023 compared to $321.2 million in 2022. This highlights the company’s strong cash flow. Vontier Corporation expects adjusted diluted net EPS to reach $3.00 to $3.15 on Q1 2024 guidance and adjusted diluted net EPS of $0.68 to $0.72 for the same period.
Recently, the company announced its divestiture of its Coats Company to support its future strategies and growth. Wrapping it all together, the company’s strong cash flow and the success of its connected mobility segment make it worth checking out.
Tesla Inc. (TSLA)
Our next company needs no introduction, Tesla Inc. (NASDAQ:TSLA). While it is well known for its EV cars, it also offers energy storage systems and EV charging for its vehicles. The company’s standard charging plug is expected to be adopted by various manufacturers like BMW and Audi. The latest announcement regarding the IONNA joint venture also puts Tesla’s North America Charging Standard or Combined Charging System ports as compatible charging ports in the network.
While the EV charging news may be exciting, we should still look at TSLA as a whole in its financials. According to its latest financials, company revenue grew 3%, more than doubling net income to nearly $7.93 billion (GAAP), mainly from its one-time non-cash tax benefit. And, the company reported a 33% increase in its net cash YOY thanks to operating activities. This signifies a strong positive cash flow for the company.
Lastly, Tesla is quite optimistic with its humanoid robot, Optimus, and its Cybertrucks, which the company projects significant deliveries. A strong outlook for its upcoming Cybertrucks and a growing cash flow puts the company on top of our EV charging stocks.
On the date of publication, Rick Orford held long positions in TSLA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
