GreenPower Motor Company Inc, a Tiny EV Stock With 360% Upside

Wall Street Bullish on GreenPower Motor Stock

There are a few big electric vehicle stocks (EV) that attract a lot of investor attention. For example, Tesla Inc (NASDAQ:TSLA) has a market cap of $895.0 billion. There are also several tiny EV stocks that deserve attention. Overlooked GreenPower Motor Company Inc (NASDAQ:GP) has a market cap of just $131.0 million.

GreenPower is a leading designer and manufacturer of EVs that target the local cargo and delivery market, transit, shuttle, and school sectors.

GreenPower Motor Company Inc’s school buses and cargo trucks might not be as exciting as Tesla’s sleek sports cars, but when it comes to demand, there are many governments and transit providers looking to buy medium-duty and heavy-duty commercial EVs.

In 2020, 1,600 medium-duty and heavy-duty commercial EVs were sold in the U.S. That number is projected to top 50,000 in 2025, 227,000 in 2030, and 912,000 in 2040. That represents a compound annual growth (CAGR) rate of 37.3%. (Source: “Investor Presentation, November 2022,” GreenPower Motor Company Inc, last accessed February 7, 2022.)

Electric bus sales are expected to be robust, growing from 2,037 in 2020 to more than 25,000 in 2030 and 76,000 in 2040. That represents a CAGR of 19.9%.

Wall Street is on board with GreenPower Motor Company Inc. Of the analysts following GP stock, their 12-month low estimate is $13.02, average estimate is $21.03, and high estimate is $28.04. This points to potential gains of 115%, 247%, and 363%, respectively, from GreenPower Motor stock.

Chart courtesy of StockCharts.com

About GP Stock

GreenPower Motor Company Inc designs, manufactures, and distributes purpose-built battery-electric zero-emission vehicles for the cargo/delivery, transit, shuttle, and school sectors. (Source: “Investor Presentation, November 2022,” GreenPower Motor Company Inc, op cit.)

“Purpose-built” means the company’s vehicles are designed, engineered, and built from the ground up as EVs, not converted from a combustion-engine vehicle.

GreenPower Motor Company Inc’s flagship “EV Star” minibus is the first (and so far, only) Class 4 EV that is both Altoona-certified and Buy America Act-compliant.

Altoona testing is designed to determine how well a vehicle will withstand the grueling requirements of transit duty. The testing focuses on aspects such as maintainability, reliability, safety, performance, structural integrity, energy economy, noise, and emissions.

Being Altoona-certified and Buy America Act-compliant opens the door to highly lucrative federal incentives. For instance, the Federal Transit Administration (FTA) will subsidize up to 80% of the purchase price for vehicles that are Buy America Act-compliant and Altoona-tested by eligible transit properties.

GreenPower Motor Company Inc’s customers tend to start with small orders then increase the size of their orders after they see the vehicles perform in real-world situations. Over the last few years, several of the company’s customers have purchased multiple units and follow-on orders with the potential for larger purchases.

Thanks to its existing production capacity and pipeline growth, GreenPower Motor Company Inc doubled its sales in its fiscal year 2020 (ended March 31, 2020) and also reported excellent sales figures in fiscal 2021. Since fiscal 2019, the company has maintained at least a 30% gross margin.

To date, GreenPower Motor Company Inc has reported more than 180 deliveries and 200 orders from universities, airports, transit authorities, and van pooling services.

Its customers include Antelope Valley Transit Authority, Jacksonville Transit Authority, Sacramento Regional Transit, San Diego Airport Parking Co, Port of Orlando Seaport, and University of California San Francisco.

Great Second-Quarter Results

For its fiscal 2022 second quarter (ended September 30, 2021), GreenPower announced that its revenue increased by 57% year-over-year to $4.4 million on the delivery of 44 vehicles. (Source: “GreenPower Reports Fiscal Second Quarter 2020 Financial Results,” GreenPower Motor Company Inc, November 12, 2021.)

That’s compared to revenue of $2.8 million on the delivery of 15 vehicles in the same prior-year quarter.

For its second quarter of fiscal 2022, GreenPower Motor Company Inc reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $1.3 million. That’s compared to an adjusted EBITDA loss of $1.1 million in the same prior-year period.

The company’s working capital increased to $31.3 million as of September 30, 2021, compared to $30.8 million as of March 31, 2021.

During the second quarter of fiscal 2022, GreenPower Motor Company Inc:

• Launched the “BEAST Type D” all-electric school bus
• Delivered the first two “BEAST” school buses
• Completed a follow-on sale of 24 EV Stars to Zeem Solutions
• Delivered the first 10 EV Star cabs and chassis to an end user in Southern California
• Sold seven EV Stars to a group of customers in California, to be used for employee transportation at Fortune 500 companies, the Temecula, CA public transportation system, and to a vehicle upfitter
• Announced an original equipment manufacturing (OEM) agreement with autonomous vehicle technology provider Perrone Robotics, Inc. to accelerate autonomous shuttle offerings

GreenPower Motor Company Inc’s president, Brendan Riley, commented, “To keep pace with anticipated demand, we continue to build significant inventory with nearly 260 units in various stages of production and over 70 units in finished goods at the end of the quarter.”

He added,

The receipt of our 292 Card from the California Highway Patrol allows us to accelerate deliveries of our all-electric BEAST school bus which we expect to have a significant impact on revenues in the second half of [fiscal 2022]. Most importantly, we continue to see substantial repeat demand from existing customers, which is a testament to the performance of GreenPower vehicles in the real world environment.

(Source: Ibid.)

Analyst Take

GreenPower Motor Company Inc is a great, overlooked EV company that has been reporting strong sales and pipeline growth.

The company has a diverse customer base and its flagship product is the first in its class to be Altoona-certified and Buy America Act-compliant.

GreenPower Motor has significantly expanded its sales infrastructure and network, and it expects to see the benefits of that investment materialize over the next several quarters.

That’s all positive news for GreenPower Motor stock investors.