Nuvve Stock: Early-Stage EV Stock Presents Contrarian Opportunity

NVVE Stock an EV Infrastructure Play With Tremendous Upside

There’s no debate that the world is moving away from gas and diesel vehicles toward electric vehicles (EVs). In particular, there’s been a significant amount of EV adoption in China and Europe. The U.S. is behind, but it’s been working rapidly to catch up.

While everyone talks about EV automakers, investors should also look at companies that develop and build EV infrastructure, such as EV chargers. An extensive network of EV charging stations is needed to power EVs.

That’s where Nuvve Holding Corp (NASDAQ:NVVE) comes in. The company develops vehicle-to-grid (V2G) technology that allows electricity to move from EVs to the electrical grid and vice versa. (Source: “Investor Relations,” Nuvve Holding Corp, last accessed July 25, 2022.)

Think about it this way. If your EV has excess stored power, you can use V2G technology to sell the stored power to the electrical grid. Alternatively, if your EV needs power, you can charge it up by connecting it to the grid. The concept makes a whole lot of sense.

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The global V2G technology market was approximately $1.8 billion in 2021 and is expected to rise at a compound annual growth rate (CAGR) of 48% to $17.4 billion by 2027. (Source: “Vehicle-to-Grid Technology Market,” Precedence Research, last accessed July 25, 2022.)

Yet, Nuvve Holding Corp’s shares have been sliding. As of this writing, they’re down by 68% in 2022 and down by 76% from their 52-week high of $17.30 in November 2021. In November 2020, Nuvve stock traded as high as $22.74. Now just around $4.00 per share, it’s time for investors to take a look.

Chart courtesy of StockCharts.com

Bright Financial Forecast for Nuvve Holding Corp

The adoption of V2G technology is still in its early stage, but given the high expected growth in the number of EVs and the amount of EV infrastructure, the potential is significant for Nuvve Holding Corp.

The company’s revenues have been insignificant so far, but their growth over the next decade could be massive.

The consensus analyst estimate is that Nuvve will report revenues of $27.4 million this year. The high estimate is $35.3 million. Analysts expect this to be followed in 2023 by revenue growth of 143.5% to $66.6 million—with a high estimate of $75.0 million. (Source: Nuvve Holding Corp. (NVVE),” Yahoo! Finance, last accessed July 25, 2022.)

Of course, these estimates are based on many assumptions, including the rate of EV adoption, which means the estimates and actual results will likely vary.

Fiscal YearRevenues (Millions)Growth
2019$2.58N/A
2020$4.2163.3%
2021$4.19-0.5%

(Source: “Nuvve Holding Corp.” MarketWatch, last accessed July 25, 2022.)

For now, Nuvve needs to focus on growing its revenue base. The capital expenditure needed to build capacity is high and will result in continued losses and negative free cash flow (FCF).

Nuvve Holding Corp lost $1.64 per diluted share in 2021 based on generally accepted accounting principles (GAAP). The encouraging news is that analysts expect the company’s loss to narrow to $1.38 per diluted share this year and to $0.25 per diluted share in 2023. (Source: Yahoo! Finance, op. cit.)

Nuvve Holding Corp’s FCF has been negative and is expected to remain this way for years as the company works on growing its revenue base.

Fiscal YearFCF (Millions)Growth
2019-$4.2N/A
2020-$3.126.6%
2021-$29.5-850.5%

(Source: MarketWatch, op. cit.)

A major plus is that Nuvve Holding Corp has a healthy balance sheet, which will allow the company to grow. At the end of 2021, Nuvve had minimal debt of $28,330 and cash of $40.7 million. (Source: Yahoo! Finance, op. cit.)

Moreover, Nuvve might be eligible for some of the U.S. government’s EV infrastructure funding.

Analyst Take

This is an exciting time for the EV industry (and for investors in EV stocks).

The required expansion of EV infrastructure is going to be significant, and this will power the adoption of V2G technology. In this environment, Nuvve Holding Corp is a company that’s perfectly suited for growth.

For contrarian investors, the current weakness in NVVE stock’s price presents an opportunity.