Lightning eMotors Inc Had Great Year & Has Excellent Outlook
A great original equipment manufacturer (OEM) in the electric vehicle (EV) space that doesn’t get the attention it deserves is Lightning eMotors Inc (NYSE:ZEV). The company produces zero-emission medium-duty and specialty vehicles—as well as powertrains and other technologies—for commercial fleets.
Most investors probably aren’t familiar with ZEV stock because it only began trading on the New York Stock Exchange in May 2021. Lightning eMotors Inc has been around since 2009, though, and it has been deploying complete zero-emission-vehicle solutions for commercial fleets since 2018.
And while Lightning eMotors stock hasn’t been attracting much attention from investors—its price has been static year-to-date and is down by 44% year-over-year—there’s a lot of reason to be excited about ZEV stock for the long term.
For starters, Lightning eMotors Inc has a first-mover advantage in an annual total addressable market of $191.0 billion. And that large market opportunity is being driven by the following positive industry trends:
- Declining cost of EVs compared to internal-combustion-engine vehicles
- Supportive regulatory developments
- Government subsidies
- Corporate sustainability goals of achieving zero emissions
- Development of EV charging infrastructure, with a global target of 290 million charging points by 2040
- Larger OEMS not focusing on medium-duty EVs
- Smaller players in the EV sector having a narrower portfolio than that of Lightning eMotors Inc
Lightning eMotors has a blue-chip roster of customers and partners, including Amazon.com, Inc. (NASDAQ:AMZN), Berkshire Hathaway Inc. (NYSE:BRK.B), Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Winnebago Industries, Inc (NYSE:WGO). (Source: “Investor Presentation: March 2022,” Lightning eMotors Inc, last accessed March 30, 2022.)
Lightning eMotors recently reported exceptional fourth-quarter and full-year financial results.
Moreover, the company has a $171.0-million order backlog and a $1.3-billion sales pipeline. Since the start of 2020, the company’s order backlog has grown by 500%, driven by new and repeat-order customers. Over the same time frame, Lightning eMotors Inc’s sales pipeline has soared by 800%.
And that momentum is expected to continue.
That’s why Wall Street analysts are so bullish on Lightning eMotors stock, with a 12-month average share-price target of $9.67 and high estimate of $13.00. This points to potential gains from ZEV stock of 62% and 118%, respectively.
Chart courtesy of StockCharts.com
About ZEV Stock
Lightning eMotors provides complete electrification solutions for urban commercial fleets. The company designs, engineers, customizes, and manufactures zero-emission vehicles and parts to support a wide array of customer needs. (Source: “Investor Presentation: March 2022,” Lightning eMotors Inc, op. cit.)
This includes Class 3 through Class 7 medium-duty and specialty commercial EVs, such as ambulances, box trucks, cargo vans, motor coaches, passenger vans, school buses, shuttle buses, transit buses, and work trucks.
It also includes powertrains and other technologies for OEMs and second-stage vehicle manufacturers. Lightning eMotors Inc provides solutions including advanced analytics software, Energy-as-a-Service, and EV-as-a-Service. The company’s analytics software platform, which is offered on a subscription basis, collects drive cycle and real-time vehicle performance data.
Lightning eMotors’ current annual zero-emission-vehicle production capacity is 1,500, but at full capacity, it can scale up to 20,000 vehicles and powertrain systems per year.
Lightning Energy, which is a division of Lightning eMotors Inc, provides complete charging solutions, including planning, utility integration, microgrid integration, installation, support, financing, and low-carbon fuel standard credit monetization.
Record Q4 and 2021 Results
For the fourth quarter ended December 31, 2021, Lightning eMotors announced that its revenue increased by 13% year-over-year to a record $4.2 million. (Source: “Lightning eMotors Reports Financial Results for Fourth Quarter and Full year 2021,” Lightning eMotors Inc, March 28, 2022.)
The company’s fourth-quarter 2021 net income was $22.2 million, or $0.28 per share, compared to a net loss of $13.4 million, or $0.42 per share, during the prior year. The increase in net income was primarily due to a $40.0-million gain from the non-cash change in the fair value of the earnout liability.
For the fourth quarter, Lightning eMotors Inc reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $15.9 million, compared to an EBITDA loss of $5.1 million during the same prior-year period.
The company’s adjusted net loss in the fourth quarter of 2021 was $20.0 million, compared to $6.9 million during the same period of 2020.
Lightning eMotors Inc’s management noted that, while the company’s second-quarter and third-quarter 2021 revenue was constrained by the supply of batteries and other components, and its fourth-quarter revenue was constrained by chassis availability, it was able to mitigate several other supply chain constraints and sell a record 146 complete zero-emission vehicles in 2021.
It’s also important to note that Lightning eMotors didn’t lose any sales in the fourth quarter due to the supply chain delays. Rather, its revenue was simply pushed forward to future quarters.
For the full year, Lightning eMotors Inc’s revenue jumped by 131% year-over-year to a record $21.0 million. Lightning eMotors reported a full-year net loss of $100.8 million, or $1.67 per share, compared to a net loss of $37.7 million, or $1.25 per share, in the prior year.
The company had a full-year 2021 adjusted EBITDA loss of $38.8 million, compared to $13.2 million in full-year 2020. Its adjusted net loss in 2021 was $53.0 million, compared to $16.5 million in 2020.
Lightning eMotors Inc ended the year with $168.5 million in cash and cash equivalents.
The only full-range manufacturer of Class 3 through 7 battery-electric and fuel-cell EVs, Lightning eMotors Inc capped a transformational year in which it announced new strategic OEM partnerships, increased its sales pipeline, expanded its factory capacity, and shipped new products.
And, judging by the bullish calls from Wall Street analysts, it appears as though 2022 and 2023 could be just as monumental for Lightning eMotors stock.