With the pedal to the metal, electric vehicle stocks show no signs of slowing. In fact, most could see far more upside including Tesla (NASDAQ:TSLA), Nio (NYSE:NIO), and most notably, Workhorse Group (NASDAQ:WKHS) and WKHS stock.
The last time I weighed in on the stock, I said, “While the shares won’t explode overnight, I strongly believe that they could double. I said the same thing as the stock traded at $17.03 before it ran to nearly $31 a share.”
Granted, the stock recently pulled back after the U.S. Postal Service delayed its contract decision, but there’s still opportunity here. Remember, just because the contract was delayed doesn’t mean Workhorse Group is out of the running.
The WKHS stock could still run higher again on the anticipation of a coming decision.
After all, the postal service is still in desperate need of upgrading its ancient fleet of vehicles. And Workhorse Group is still in the running. From here, I strongly believe the WKHS stock could rally back to nearly $31 a share again soon.
Workhorse Could See All or Part of the USPS Award
I also wouldn’t get too wound up over the recent downgrade from Roth Capital’s Craig Irwin. He recently downgraded WKHS stock from a buy to a hold, with a target cut to $27. While the contract was delayed, it’s a temporary setback.
Weakness in the stock is a buy opportunity, in my opinion.
And sure, according to the postal service, as quoted by Barron’s said, “Due to the current Covid-19 pandemic and its impact on Postal Service and supplier operations, an award(s) is currently planned for the production phase by the end of the calendar year.”
But, as noted by Barron’s contributor Al Root, “The potential addition of an “s” to award is significant. It raises the possibility of multiple winners. That’s good for Workhorse’s business because it raises the odds of success.”
In addition, while it’s not a certainty Workhorse will win the postal service contract, investors can still make money on the stock on the anticipatory momentum. For example, buy now and simply wait for the momentum to build up ahead of the contract date.
Electric Vehicle Boom Shows No Signs of Slowing
Tesla just blew earnings out of the water, with hopes of selling half a million EVs this year. EPS of 76 cents was well above expectations for 57 cents. Revenue of $8.77 billion was above estimates for $8.36 billion. That’s only creating even more excitement over EV stocks.
Helping, General Motors (NYSE:GM) just announced it would invest $2.2 billion in U.S. manufacturing to increase EV production. Better, governments around the world are forcing millions into EVs. In the U.S. for example, California Gov. Gavin Newsom signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. That’s further fuel for the EV boom.
In short, the electric vehicle boom has only started. With it, we could see further upside in related stocks like Workhorse Group easily. This is another reason to buy WKSH stock on weakness.
Most Analysts Still Seem to Like WKHS Stock
Over the last month, Oppenheimer analyst Colin Rusch said WKHS stock was a leader in last-mile deliveries. He has a price target of $23.
And, as I noted on Sept. 25, “Cowen analyst Jeffrey Osborne is impressed by WKHS stock.
“The [second half production] ramp remains on track and management continues to target [making] 300 [to] 400 vehicles by the end of the year. After a tough few quarters, we see greener pastures ahead.”
While I don’t expect the stock to explode overnight, I still believe we could see $31 again soon. The postal service contract is still on the table. It was only delayed, not canceled. Use recent weakness as an opportunity to buy.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.