Chronicle Journal: Finance

Why is Beam Global Stock Soaring?

The zero-emission plans of the federal government and lower recurring expenses should accelerate consumers’ shift to electric vehicles from gasoline-powered ones. This, along with the government’s plans to dramatically expand charging infrastructure across the U.S., should bode well for EV charging solution providers like Beam Global (BEEM). With a strong position in the EV infrastructure space, we believe the company will continue to experience robust growth and deliver promising returns. Let’s take a closer look at the stock.

Beam Global (BEEM) is the producer of solar-powered products and proprietary technology solutions in the United States and internationally. The company provides electric vehicle autonomous renewable charger products, drone charging, outdoor media and branding, and energy security.

BEEM recently laid the foundations for its Outdoor Media Business Unit, which has the potential to become  the company’s biggest and most profitable growth engine. And with President-elect Joe Biden’s proposal  to deploy 550,000 public EV charging stations and usher in a new era for the electrification of transportation, BEEM is well-positioned to grow exponentially heading into 2021.

BEEM’s efforts to  produce a  first-of-its-kind electric aircraft should also help it stand out in the rapidly growing EV market.

A growing nationwide trend with respect to EV charging stations, along with the exceptional demand the company is seeing for scalable EV charging infrastructure solutions, have allowed BEEM to gain 1554.9% over the past year. This impressive performance, combined with several other factors, has helped BEEM earn a “Strong Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates BEEM: 

Trade Grade: A

BEEM is currently trading above its 50-day and 200-day moving averages of $27.82 and $14.74, respectively. This  that the stock is in an uptrend. The stock has gained 86.7% over the past month, reflecting solid short-term bullishness.

BEEM’s revenue has declined 30.7% year-over-year to $1.24 million for the third quarter ended September 30, 2020 due to delays in the receipt of orders, partially related to the impact of the COVID-19 virus. The company’s cash flow has increased 220.4% for the nine-month period to $12.33 million, while working capital grew 170.6% to $13.91 million.

On December 17, BEEM announced that the City of Montebello will install two EV ARC solar-powered EV charging terminals to serve city fleet vehicles and provide an emergency preparedness asset. The company expects to witness a significant growth acceleration in 2021 as the Federal government joins local governments in aggressively investing in the infrastructure to support the sustainable electrification of transportation.

BEEM recently announced an agreement with Maxim Group LLC under which the underwriter has agreed to purchase 250,000 shares of the company’s common stock. The proceeds of the offering are expected to be approximately $7.5 million.

Buy & Hold Grade: A

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers, BEEM is well positioned. The stock is currently trading just 2.2% below its 52-week high of $69.68, which it hit on December 28.

The company’s net revenue has grown at a CAGR of 18.9% over the past three years. This can be attributed to its  increasing deployment of public EV charging stations across the country and growing investments in the development of innovative solutions.

Peer Grade: A

BEEM is currently ranked #4  of 19 stocks in the Solar industry. Other popular stocks in this industry are Canadian Solar, Inc. (CSIQ), Azure Power Global Limited (AZRE) and Renesola Ltd. (SOL).  CSIQ, AZRE, and SOL have gained 135.3%, 215.2%, and 812.4%, respectively, over the past year. This compares to BEEM’s 1554.9% returns over this period.

Industry Rank: C

The Solar industry is ranked #91 of the 123 industries. The companies in this industry design, manufacture, install, and market solar powered products and solar energy solutions to residential, commercial, government, and other customers worldwide.

The solar energy sector has felt the impact of the coronavirus pandemic. The public health crisis dampened demand and led to a decrease in consumer confidence, which, in turn, reduced consumption. In addition, supply chain bottlenecks, both nationally and internationally, and project delays have slowed the growth of this industry.

Overall POWR Rating: A (Strong Buy)

BEEM is rated a “Strong Buy” due to its impressive financials, short-and-long-term bullishness, and solid price momentum, as determined by the four components of our overall POWR Rating.

Bottom Line

With more drivers adopting vehicles powered by batteries, and more automakers increasingly committing to manufacture electric vehicles, BEEM has the potential to soar in the coming months, despite gaining 1554.9% over the past year. As the demand for electric car charging stations continue to rise , the company should see  a  big improvement in its revenue and earnings. Analyst sentiment, which gives a good sense of a stock’s future price movement, is impressive for BEEM. It has an average broker rating of 1.33, indicating favorable analyst sentiment. Of three  Wall Street analysts that rated the stock, 1 rated it a “Strong Buy.” The consensus EPS estimate for the current quarter ending December 31, 2020 indicates a 57.1% improvement year-over-year. The consensus revenue estimate of $1.63 million for the current quarter indicates a 229.3% increase from the same period last year.

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BEEM shares were trading at $71.03 per share on Wednesday morning, up $2.89 (+4.24%). Year-to-date, BEEM has gained 1,424.25%, versus a 17.96% rise in the benchmark S&P 500 index during the same period.

About the Author: Imon Ghosh

Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization.


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