VLTA Stock Bullish on Record Q2 Results & Strong Guidance
When it comes to investing catchphrases, “follow the money” is about as good as it gets. And when it comes to President Joe Biden’s $1.0-trillion infrastructure bill, one of the biggest spending categories is electric vehicle (EV) charging stations.
Recently, all 50 states submitted EV infrastructure deployment plans, which are required under the federal $5.0-billion EV charger program. The infrastructure plan also includes a $2.5-billion competitive grant program for meeting administration priorities.
The money will start to flow soon, so we’ll start to see a major deployment of EV charging stations over the next year or so.
One under-the-radar stock that could benefit from the rising demand for EV charging stations is Volta Inc (NASDAQ:VLTA). The company only listed its shares on the New York Stock Exchange in August 2021 and frankly, Volta stock hasn’t done all that well since then.
As of this writing, VLTA stock is down by:
- 21% over the last month
- 71% year-to-date
- 80% year-over-year
To be fair, this sell-off has had more to do with factors like rising interest rates, traders pivoting away from growth stocks, runaway inflation, the war in Ukraine, and fears of a recession than anything going on at Volta Inc.
The company recently reported record second-quarter results and provided strong third-quarter and full-year guidance.
Record financial results, new installation agreements, new collaborations, and new advertising clients have helped Wall Street wake up and see Volta Inc’s near-term potential. Analysts have provided a 12-month share-price target of $4.00 to $7.00. This represents upside potential for Volta stock in the range of 92% to 236%.
About Volta Inc
Volta owns, installs, operates, and maintains EV charging stations in the U.S. It currently operates 2,920 stalls at 927 sites in 28 states and territories, including the West Coast, Texas, Florida, and the eastern seaboard. It also has charging stations in France, Switzerland, and Germany. (Source: “Q2 2022 Earnings Call,” Volta Inc, August 11, 2022.)
The company’s stalls sport 5,425 massive screens, which are used to display advertising (which can generate serious revenues).
Volta Inc’s charging stalls can be configured to charge more than one vehicle at a time. Moreover, the company uses its “PredictEV” software to forecast grid capacity, EV charging penetration, and charger utilization.
Volta has a deployment pipeline of 3,942 stalls and 7,285 screens at 1,468 sites.
The company works with real estate and retail partners that have national and regional multi-site portfolios—as well as municipalities and local businesses—to deploy EV charging stations in locations including retail centers, grocery stores, pharmacies, parking lots, restaurants, schools, and universities.
“By building not just a network of chargers, but a dual energy and digital advertising platform, we believe Volta can scale revenue even faster than the EV adoption curve – offering the quickest path to profitability and the highest revenue per station,” said Vince Cubbage, the company’s interim CEO. (Source: “Volta Inc. Reports Second Quarter Financial Results,” Volta Inc, August 11, 2022.)
The company’s advertising customers include Apple Inc (NASDAQ:AAPL), Kia Corp (KRX:000270, OTCMKTS:KIMTF), Six Flags Entertainment Corp (NYSE:SIX), and General Mills, Inc. (NYSE:GIS).
Coca-Cola Co (NYSE:KO), another customer of Volta Inc, completed a case study which found that the brands featured in ads on Volta screens saw $2.5 million in attributable sales and a return on ad spending that was 56% higher than the average digital out-of-home ADUSA Supply Chain food and beverage ad campaign.
Record Second-Quarter Results
For the second quarter ended June 30, Volta Inc announced that its revenue increased by 121% year-over-year and 83% sequentially to a record $15.3 million. (Source: Ibid.)
The company’s advertising revenue in the second quarter went up by 73% year-over-year and 83% sequentially to $11.2 million. Volta Inc’s installed base of charging stalls went up by 48% year-over-year and 15% sequentially to 2,920.
The company reported a second-quarter 2022 net loss of $37.4 million, or $0.22 per share, compared to a second-quarter 2021 net loss of $20.5 million, or $1.09 per share.
Volta Inc ended the second quarter with cash and cash equivalents of $105.3 million.
“Volta had a record quarter, and these results demonstrate the power of our differentiated business model,” said Cubbage. (Source: Ibid.)
In the second quarter, Volta’s new advertising brand partners included United Airlines Holdings Inc (NASDAQ:UAL), Lyft Inc (NASDAQ:LYFT), Bank of America Corp (NYSE:BAC), and HP Inc (NYSE:HPQ).
Also during the second quarter, Volta Inc announced a collaboration with Kroger Co (NYSE:KR), the largest grocer in the U.S., to bring more EV charging stations to its locations. Kroger will install charging stations at 16 locations in the Atlanta and Indianapolis areas, and it has plans to expand that to Columbus, Cincinnati, Louisville, Nashville, Michigan, and Southern California this year.
During the second quarter, Volta Inc also announced that the city of Hoboken, NJ plans to install 25 of the company’s EV charging stations—with 46 advertising screens—over the next 18 months.
For the third quarter of 2022, Volta Inc expects to report revenue in the range of $17.0 to $18.0 million, more than double the $8.5 million it reported for the third quarter of 2021.
For the full year, Volta Inc expects to report:
- Revenue in the range of $70.0 to $80.0 million, more than double the $32.3 million recorded last year
- Total incremental connected stalls in the range of 1,700 to 2,000
- Total incremental connected sites in the range of 650 to 750
Volta Inc is a great, under-the-radar EV charging company that has been adding new charging stalls across the U.S. and making moves into Europe. The company has also been securing agreements with blue-chip companies to advertise on the screens of its charging stations.
This has allowed Volta to report record financial results and provide impressive guidance. VLTA stock is currently a penny stock, but it might not be for long.