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GP stock is starting to gain some serious momentum
Tiny electric bus maker GreenPower Motor (NASDAQ:GP) was on virtually no one’s radar three months ago. This was a $200 million company, with very little business or production volume, and a GP stock price of just $10.
But folks who were subscribed to InvestorPlace’s bold new newsletter, The Daily 10X Stock Report, knew all about GreenPower Motor. That’s because on Nov. 12 — when GP stock was trading just a hair above $10 — we told readers that this tiny electric bus maker was ready to take off like a rocket ship.
Believe it or not, this sort of explosive growth has become commonplace for subscribers.
After all, The Daily 10X Stock Report is committed to delivering to your inbox, every single trading day, a top stock pick with 10X upside potential. We’ve been doing this since May 2020. Over that stretch, our picks have averaged a jaw-dropping 120% gain, including multiple 10X winners in names like NIO (NYSE:NIO), Plug Power(NASDAQ:PLUG), Magnite (NASDAQ:MGNI), Arcimoto (NYSE:FUV), Zomedica(NYSE:ZOM), and Mind Medicine (OTCMKTS:MMEDF).
But for now, let’s return to GP stock. We featured GreenPower Motor because we said the stock had 40X upside potential. It’s up just 3X since then. Does that mean there’s still a lot of upside left in this emerging EV stock?
GP Stock: The Commercial EV Revolution
When it comes to GP stock, the big-picture bull thesis hinges on the commercial EV revolution — or the electrification of the world’s commercial fleets.
Every year, about 10 million medium-to-heavy duty commercial busses, trucks and vans are sold to fleet operators all across the world. Very, very few of them are electric today. According to Bloomberg NEF, just about 3,600 electric medium- and heavy-duty commercial vehicles (CVs) and busses were sold in the U.S. in 2020.
That’s less than 0.1% penetration.
But… thanks to growing legislative pressure to cut carbon emissions, falling costs of electric batteries, expanding charging infrastructure and improving specs of electric CVs… Bloomberg NEF sees the number of commercial EVs rising by nearly 7,000% to over 250,000 vehicles by 2030.
That’s enormous growth.
GreenPower Motors is at the epicenter of this enormous growth.
A Real-Deal Commercial EV Maker
The CVs themselves have great specs.
The EV Star is big (sits up to 25 people), powerful (has a 118 kWh battery pack), and capable (can drive up to 150 miles on a single charge). The transit bus is also big (the biggest model can seat up to 100 people), powerful (has a near 500 kWh battery pack), and capable (up to 200 miles of driving range).
The school bus – dubbed BEAST (love the name; it’s short for Battery Electric Automotive School Transportation) – is much of the same: big, powerful, and capable.
Indeed, all of GreenPower’s CVs have been rigorously tested and approved by the Federal Transit Administration.
So… these vehicles are no joke. They aren’t Nikola trucks that are being filmed rolling down a hill. GreenPower’s purpose-built electric CVs are the real deal, which implies a solid outlook for GP stock amid the commercial EV revolution of the 2020s.
Business Momentum Ramping
The reasons GP stock has taken off like a rocket ship over the past three months is that the company’s business momentum is ramping with impressive pace.
GreenPower started delivering its vehicles back in late 2017.
Since then, the company has signed contracts with multiple commercial customers like UCLA, San Diego Airport Parking Co, Sacramento Regional Transit, and more – while scaling vehicle deliveries from near zero in 2017, to 13 in 2018, to 68 in 2019.
Forest River — a Warren Buffet-owned company that is one of the largest recreational vehicle companies in the world — just placed an order for 150 GreenPower vehicles. ABC Bus ordered 100 vehicles. GreenCommuter has ordered 200 vehicles.
In other words, GreenPower Motors has a contract backlog which gives clear visibility to the company ramping towards 100+ deliveries in 2021 and even 200+ deliveries in 2022.
Of equal importance:
- Customers like the product. Multiple customers, including UCLA, have made follow-on orders with GreenPower.
- The new customer list is expanding. GreenPower just made its first delivery in Vancouver this past quarter.
- The company is launching new products. GreenPower delivered its first fully autonomous EV Star to Jacksonville Transportation Authority in December.
- Production is ramping. The company has dramatically increased its production capacity to now sit at 20 EV stars per month and 10 electric school buses per month. Remember, this is a company that delivered less than 6 vehicles per month in 2019, so a 35-vehicle production monthly run-rate represents huge expansion.
Plus, the powers that be in Washington D.C. have significantly accelerated their commitment to electrifying commercial fleets across America over the next decade.
Another 10X Upside for GreenPower Stock?
Here’s the back-of-the-envelope math for GP stock to soar another 10X from here.
The electric truck and bus market in the U.S. is expected to grow by nearly 7,000% to ~250,000 units by 2030. GreenPower presently controls about 3.5% of that market, based on 2020 projected delivery volumes.
As an emerging leader in this market, with technically sound vehicles and a huge contract backlog that comprises some big customers, GreenPower could easily nab 10% market share by 2030 – implying 25,000 deliveries in 2030. At an average price of $200,000, that implies 2030 revenue potential of $5 billion.
Given the company’s current 30% gross margin profile, I think that easily flows into $500 million in net profits – and a 20X multiple on that implies a potential $10 BILLION valuation in the long run.
GreenPower Motor is worth about $600 million today. So, yes, GP stock can rise much more than 10X from here in the long run.
Bottom Line on GP Stock
Subscribers to The Daily 10X Stock Report got in on GP stock when it was trading at just $10. But don’t worry. The commercial EV revolution is just getting started, and GreenPower is only strengthening its competitive positioning in that burgeoning market.
This rally is far from over.