Best EV Stock to Buy Now: Rivian Automotive vs. Li Auto vs. Polestar

Whether you are an environmentalist or not, there is no denying that the future is electric, and you will have to adapt to the changing environmental needs sooner or later. Governments worldwide are working rapidly to reduce environmental damage and are implementing policies to transition toward a cleaner and greener future. This has led to the massive growth of the electric vehicle industry in the last five years, and the subsidies introduced by the Inflation Reduction Act will also boost sales in the near term. Smart investors have started looking for the best EV stocks to buy now to make the most of the transition toward EVs.

With gas prices surging to all-time highs, the interest in electric vehicles has grown. EVs have shown strong growth over the past two years, and I believe they will continue to grow this decade. Given the sales numbers reported by EV makers, it is clear that the interest in EVs is growing, and there is a massive market out there. Tesla (NASDAQ:TSLA) may be a leader in the EV industry, but several companies have started to give it stiff competition. With that in mind, let’s compare the three hot EV stocks in the market today. This article looks at the best EV stocks to buy now.

Best EV stocks to buy now: Rivian Automotive (RIVN)

When looking at the best EV stocks to buy now, let’s start with Rivian (NASDAQ:RIVN). The EV maker is competing in a crowded market and is not ready to take the route of price cuts. It has an ambitious outlook and is very responsive to the customers’ needs. RIVN stock is trading at $13 today, much lower than the 52-week high of $40. The stock is down 55% over the past six months, from $30 to $13. This could be due to macroeconomic factors and the China lockdown that affected all EV makers. However, RIVN stock still looks like a good long-term bet.

The premium EV maker recently reported first-quarter results and maintained its outlook of producing 50,000 EVs in 2023. However, it only produced 9,395 EVs in the first quarter, and looking at that figure, it looks like producing 50,000 vehicles in the next nine months could be tough.

It reported $661 million in sales in the first quarter and a net earnings loss of $1.79. Its revenue showed nearly a 600% rise year-over-year, and its backlog of 70,000 reservations in 2021 reached 114,000 in 2022. The company hasn’t reported this figure after that. It also plans to launch a mass-market vehicle next year. My colleague Larry Ramer expects the stock price to hit $165 by 2028. Rivian has solid liquidity, but it can report better numbers if it manages to cut costs. It has a strong balance sheet, ambitious plans, and a premium model with high market demand. RIVN stock looks like a good long-term bet, but investors should consider the risks.

Li Auto (LI)

A recent favorite of investors, Li Auto (NASDAQ:LI), has been making solid moves in the competitive EV industry. After reporting impressive quarterly results, Li Auto is here to triple its model lineup by 2025. The company reported a positive income from operations compared to last year’s loss. Its net income was $136 million, and the deliveries increased 66% YOY to more than 52,584 vehicles.

In April, the company delivered 25,681 vehicles, up 516% YOY. Li Auto has hit a delivery number of 78,265 in just four months. Now, it plans to deliver between 76,000 to 81,000 vehicles this quarter, which looks like an achievable number to me. It only needs to deliver 55,319 vehicles in two months to meet the higher end of the target, which would mean over a 166% rise compared to the previous year’s second quarter. Li stock is one of the best EV stocks to buy, trading at $28 today.

Li Auto has $10 billion in cash and is growing profits. However, Li’s cost of sales is alarmingly high and has nearly doubled (102.2%) in the recent quarter from the same period the previous quarter. Until the company manages to keep the costs in control, it will not be able to report stellar profit numbers.

Li Auto looks like a promising EV startup with solid demand for its EVs, but only if it can control the costs will it be able to make the most of its potential. Currently, LI stock is the best EV stock compared to the other two companies discussed here. Morgan Stanley has raised its price target to $40 with an Overweight rating. Even BoFA has a buy rating with a price target of $37.

Polestar (PSNY)

A Swedish EV startup, Polestar (NASDAQ:PSNY), has struggled but remained relative in the past year. Despite the rising competition, the company delivered 51,500 cars in 2022, an 80% rise year over year. That said, it delivered 12,076 cars in the first quarter, up 26% year over year. However, after the results, it trimmed its guidance for this year from 80,000 to 65,000. PSNY stock is trading at $3.44, down from the 52-week high of $13.

However, the stock has declined 45% in the past six months. It recently dropped after the company cut guidance, citing the pushback of the production of Polestar 3 because of software issues. Polestar now expects to roll off production in the first quarter of 2024. It aims to operate in 30 markets by the end of this year and achieve sales of 290,000 vehicles by the end of 2025. The numbers seem ambitious, but if the company manages to ramp up production, we could see them become a reality.

The company saw a 26% rise in revenue YOY to $546 million, and its adjusted loss per share was $0.10. The management expects to see 60% growth in 2023, and if it aims to achieve the same, we could see the losses reducing. It is relatively new in the EV industry and not yet profitable, but the upside potential is massive. PSNY stock looks attractive to me, but it is not without risks. However, it is a stock EV enthusiasts should keep an eye on.

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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ROKU Stock Is a No-Go, Unless You Like Slow, Rocky Stock Rides

In hindsight, it’s clear investors during the 2020/2021 runaway bull market got carried away with Roku (NASDAQ:ROKU). As you may recall, ROKU stock traded for as much as $479.50 per share during this time.

Today, of course, the stock trades at a mere fraction of this high-water mark, yet even in the mid-$50s per share, Roku is hardly a bargain.

Roku’s user base may be growing. If/when the digital ad market makes a comeback, this is likely to translate into material revenue growth. However, when it comes to reaching consistent profitability, things get a lot murkier.

What’s Holding ROKU Stock Back

After plunging during 2022, ROKU kicked off 2023 with a rapid move back to higher price levels. Starting off the year at around $40 per share, in mid-February it made a brief return to prices north of $70 per share.

ROKU stock is still up by more than 33% year-to-date, but in more recent months shares have slid back. Sure, more macro factors such as interest rates are playing a role.

As the Federal Reserve remains steadfast in its efforts to bring down inflation, hopes of “Fed pivot” on interest rates in 2023 have been dashed.

Still, what has really put pressure on shares over the past two months, and is currently holding them down, is Roku’s poor fiscal performance. This has really dampened bullishness for the stock. Macroeconomic changes have not affected Roku from growing its ad-supported streaming platform.

Last quarter, active users grew by 17% compared to the prior year’s quarter. However, revenue growth during this same period came in at only 1%.

Worse yet, Roku’s quarterly net losses have ballooned seven-fold year-over-year, with little indication that they will narrow/swing back to positive anytime soon.

Why Revenue Growth Won’t Save the Day

Sure, investors bullish on ROKU stock will counter that current growth headwinds are likely temporary. Once economic conditions normalize, the company’s revenue growth will get back well into the double-digits.

More-or-less, I agree that Roku’s growth isn’t likely to stay flatlined for long. Not only is the company continuing to grow its user base. Roku is also at work improving the monetization of its platform, as measured by revenue per user.

Yet while revenue growth could be back into the fast within a few quarters, don’t assume that this alone will save the day.

That is, if we assume that Roku fails to deliver earnings results in the coming years that are above and beyond current forecasts. Per the sell-side’s estimates losses per share are expected to come in at $3.04 and $1.86, respectively, during 2024 and 2025. And those estimates already factor in the aforementioned expected revenue growth.

Yes, this may represent big improvement from the expected $5.17 per share in losses this year, staying in the red will make it difficult for ROKU to grow, or even sustain, its valuation.

The Verdict

As Roku’s profitability challenges persist, shares will, at the very least, languish at or near present levels. The stock could even keep sliding lower, as investor patience keeps wearing thin due to continued losses. Having said all of this, don’t get me wrong. It is not as if Roku’s fate is fully sealed.

The company could still potentially provide some positive surprises from here. For instance, further cost cutting moves, such as Roku’s laying off of 6% of its workforce in March. New monetization initiatives may result in higher-than-expected revenue growth. Both are possible ways that the company could speed up its move out of the red.

Yet even as the story could change, if it does, it will change slowly. With this, consider it best to hold off buying ROKU stock. At least, until meaningful progress towards becoming profitable.

ROKU stock earns a D rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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Likelihood of June Fed interest-rate hike drops to 22.4% as debt-ceiling talks seen stalling

Traders now see a 22.4% chance of a quarter-point rate hike by the Federal Reserve in June, down from 35.6% a day ago, after talks on the debt ceiling reportedly stalled on Friday. Meanwhile, traders priced in a 77.6% likelihood that Fed policy makers will leave rates between 5% and 5.25% next month. Traders appeared to be more influenced by the debt-ceiling developments than they were by remarks by Fed Chairman Jerome Powell, who said that the benchmark interest-rate target may not have to rise as much as it otherwise would because banks are tightening credit. All three major U.S. stock indexes, along with Treasury yields like the 2- and 10-year rates, were lower after reports on the debt-ceiling developments.

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S&P reduces Western Digital credit outlook on soft smartphone, PC demand

Western Digital Corp.
WDC,
-1.08%
shares slipped Friday as the data-storage device company’s outlook was reduced by S&P Global Ratings, which held onto its “BB” issuer credit rating. S&P reduced Western Digital’s outlook to negative from stable reflecting “increased risk of a downgrade” over the next 12 months. “Continued inventory digestion at hyperscale data center customers and soft demand from smartphone and PC markets have extended recovery past our original expectations,” S&P said in a statement. Western Digital shares declined 1.7%, while the S&P 500 index
SPX,
-0.14%
was down 0.4%.

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Baker Hughes data show active U.S. oil-drilling rigs down a third straight week

Baker Hughes
BKR,
-0.04%
on Friday reported that the number of active U.S. rigs drilling for oil fell by 11 to 575 this week. That marked a third straight week of declines in number of oil rigs. The total active U.S. rig count, which includes those drilling for natural gas, also declined by 11 to stand at 720, according to Baker Hughes. The number of active natural-gas drilling rigs was unchanged at 141. Oil prices traded slightly lower in Friday dealings, with June West Texas Intermediate crude contract
CLM23,
+0.17%
down 11 cents, or nearly 0.2%, at $71.75 a barrel on the New York Mercantile Exchange.

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Why Risky SOFI Stock Is Still Worth a Long-Term Bet

SOFI stock - Why Risky SOFI Stock Is Still Worth a Long-Term Bet

Source: Michael Vi / Shutterstock

The only thing that people can agree on when it comes to SoFi Technologies (NASDAQ:SOFI), it seems, is that there will always be disagreement. The top analysts on Wall Street see different trajectories for SOFI stock, so what is a retail investor supposed to do? The answer is: listen to the bull and bear cases for SoFi Technologies and then think about buying a few shares if the bull case prevails.

Some folks will always see the glass as half empty, while others will see the same glass as half full. For example, shrank its net earnings loss by 69% from the year-earlier quarter to the first quarter of 2023. However, a pessimist might be disappointed because SoFi Technologies is still unprofitable.

Of course, you have to be your own analyst and advocate at the end of the day. Maybe, after weighing the bull and bear cases, you’ll agree with me that SOFI stock has its risks but is still worth owning.

Wedbush Issues Leans Bearish on SoFi Technologies

So, let’s start with the bearish argument. Analysts with Wedbush expressed concerns that SoFi Technologies may be “nearing a tipping point” in terms of generating fees from loan applications and sales. If that fee income declines significantly, that would certainly impact SoFi’s top and bottom lines.

Personally, I’m not overly concerned about a sharp decline in SoFi Technologies’ revenue sources. The company’s revenue grew 43% year over year in Q1 2023, and that was during a challenging time for the banking sector.

Per Barron’s, the Wedbush analysts also expect regulators to “increase scrutiny on capital ratios and stress testing” in the wake of recent bank failures. Yet, in my opinion, SoFi Technologies doesn’t belong in the same category as failed banks like SVB Financial Group (OTCMKTS:SIVBQ) subsidiary Silicon Valley Bank. SoFi Technologies is highly protective of its customers’ deposits. In fact, the company offers up to $2 million worth of Federal Deposit Insurance Corporation (FDIC) insurance per customer account.

Truist Rates SOFI Stock a ‘Buy’

For the aforementioned reasons, the Wedbush analysts downgraded SOFI stock from “neutral” to “underperform.” In contrast, Truist analyst Andrew Jeffrey initiated his coverage of SoFi Technologies with a “buy” rating.

Looking ahead, Jeffrey expects “long-term growth investors” to “embrace SoFi’s robust multiyear organic revenue, earnings before interest, taxes, depreciation, and amortization, free cash flow and free cash flow return on equity outlook.” Of course, an outlook is not a guarantee of success. Still, the point about SoFi Technologies’ optimistic forward guidance is duly noted.

Most importantly, Jeffrey appreciates SoFi Technologies’ customer-facing financial products. These products, he explains, are “designed to allow members to take control of their financial lives.” This is, to a certain extent, what separates SoFi from stodgy traditional banks. Ultimately, the Truist analyst sees SoFi Technologies as “the future of U.S. banking: digital, nimble and always on.”

Consider Your Risk Tolerance With SOFI Stock

SoFi Technologies is thoroughly modern and disruptive. As such, it’s bound to attract some critics and naysayers. That’s to be expected as SoFi seeks to alter the landscape of personal finance in the U.S.

Personally, I’m not too worried about SoFi Technologies losing significant revenue sources. I’m also not overly concerned about regulators suddenly targeting SoFi Technologies. So far, SoFi has proven itself a secure place to park one’s capital.

There’s no guarantee that the bull case for SOFI stock will be the right one. Be sure to manage your risk if you intend to take a long position in SoFi Technologies. However, feel free to invest if you agree that the company is, indeed, the “future of U.S. banking.”

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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Gold futures log biggest weekly loss in over 3 months

Gold futures climbed on Friday, but marked their biggest weekly percentage loss since early February. The precious metal was dragged below the psychologically important $2,000 level this week due to “optimism surrounding a U.S. debt deal, while markets also ramped up bets of a [Federal Reserve interest] rate hike in June,” said Han Tan, chief market analyst at Exinity Group. Gold for June delivery
GCM23
settled at $1,981.60 an ounce on Comex, up $21.80, or 1.1% for the session. Prices for the most-active contract lost 1.9% for the week, the largest weekly loss since the week ended Feb. 3, according to FactSet data.

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3 EV Stocks to Sell as a Cash Crash Starts

Investors should be eyeing EV stocks to sell in anticipation of an approaching downturn. Investors should trim their positions in high-risk industries as uncertainty looms.

Market experts have sounded the alarm, predicting a U.S. recession in the year’s second half. Given the significant economic danger on the horizon, many would happily accept a mild recession given the risks ahead.

Adding to the concerns, President Joe Biden warned of a possible economic disaster. If a consensus is not reached over raising the country’s $31.4 trillion debt ceiling, there could be trouble.

Riskier bets, such as EV stocks could face significant headwinds in this precarious environment. Therefore, investors should reevaluate their exposure and consider these EV stocks to sell.

RIDE Lordstown Motors $0.32
SOLO Electrameccanica Vehicles $0.49
FFIE Faraday Future $0.24

Lordstown Motors (RIDE)

Once a budding player in the EV space, Lordstown Motors (NASDAQ:RIDE) raised eyebrows with an SEC filing hinting at possible bankruptcy.

Foxconn’s decision to cancel last year’s investment agreement could prove to be a lethal blow for the troubled business.

The company’s mounting liquidity concerns could pose significant challenges.

Furthermore, the Ohio-based EV maker’s recent going concern notice also sheds light on its struggles to manage costs, funding concerns, and the ability to sustain the production of its Endurance vehicle.

On top of that, Foxconn’s decision to retract its $170 million investment in the firm could arguably be the final nail in the coffin. If the company fails to resolve the Foxconn dispute, a bankruptcy filing in the second half of this year seems plausible.

Moreover, despite the absence of long-term debt obligations, the potential recovery for shareholders should be negligible. Therefore, it’s best to consider offloading your positions at Lordstown Motors.

Electrameccanica Vehicles (SOLO)

Electrameccanica Vehicles (NASDAQ:SOLO) may envision itself as an innovator in the crowded EV niche with its three-wheeled electric vehicle, but the annals of history remain doubtful.

Its compact EVs are up against a steep challenge in an industry that has historically been receptive to tri-wheeled alternatives. Furthermore, its niche-focused approach has yet to prove its commercial feasibility in an intensely competitive landscape.

The company is burning through an estimated $20 million in cash reserves each quarter. Its decision to shift EV production from China to the U.S. should weigh down its bottom line further.

Though it aims to reduce costs through workforce layoffs, this short-term solution merely masks a more deep-rooted issue.

As my fellow InvestorPlace contributor Josh Enomoto highlighted, we are remarkably close to the arrival of a $25,000 EV, making a four-wheel EV slightly more expensive than Electrameccanica’s Solo. SOLO stock exhibits poor fiscal stability, painting a grim picture for the future.

Faraday Future (FFIE)

Faraday Future (NASDAQ:FFIE) made waves with its patented FF91 luxury EV back in 2017, aiming for production in 2018. However, like many EV startups, it’s faced a series of delays, relying on massive capital injections to stay afloat.

Perhaps what’s most concerning is Faraday’s plans to launch its FF91 EV at a staggering starting price of $180,000. In the next couple of years, automakers will focus on delivering more affordable EVs.

This will pressure the high-end market, particularly if the U.S. economy plunges into a recession.

The most pressing issue for the firm, though, is its precarious financial position. Launching a new vehicle is costly, and having reported a cash burn of more than half a billion dollars last year, bankruptcy remains on the cards.

With less than $34 million in cash, including restricted cash, the company needs a massive capital infusion to execute its three-phase delivery process, which seems unlikely at this point.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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Krystal Biotech stock rises after FDA approves treatment for rare skin disease

Krystal Biotech Inc.
KRYS,
+9.85%
shares rose Friday after the biotech drug company received Food and Drug Administration approval of a rare skin disease treatment. Krystal shares rose as much as 8% to an intraday high of $94.61 after the FDA approved the company’s drug Vyjuvek to treat dystrophic epidermolysis bullosa, a rare genetic condition that causes a person’s skin to tear very easily, and lacks any approved treatment. The approval is for patients as young as six months old, the company said.

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