Volta (VLTA) develops and manufactures electric vehicle (EV) charging stations. I am bullish on the stock.
Some folks would call EV chargers a “picks-and-shovels” play, to use an analogy from the gold-mining industry. That’s because you don’t have to wager on a specific EV automaker when you can invest in a business that makes the charging ports that all EV models will need.
This investing strategy certainly has merit to it. Yet, informed investors will still want to identify the best companies in this very specific niche market.
Could Volta be that company? The financials aren’t perfect, but there’s a growth story here that just might warrant a small, speculative position in VLTA stock.
A Quick Look at VLTA Stock
In August of this year, it was revealed that Volta would reverse-merge with special purpose acquisition company (SPAC) Tortoise Acquisition Corp. II. With that, Tortoise Acquisition Corp. II fulfilled its purpose and disappeared, and VLTA stock was brought to the public for trading.
Since the SPAC merger announcement, the share price has thrashed around, taking the shareholders on a roller-coaster ride. Starting at the typical pre-SPAC-merger-deal price of $10, VLTA stock rallied to $13, then dropped to $7, ran back up to $13, and landed at $9 and change in early December.
Did you get seasick following all of those price moves? Again, I must emphasize that VLTA stock is speculative due to its volatile nature.
So, for goodness’s sake, please keep your position size small with this fast-moving stock. (See Volta stock charts on TipRanks)
What Makes Volta Different
As you may be aware, Volta isn’t the only investable EV port maker. The competition in this niche market is heating up, so Volta must differentiate itself.
Apparently, the company is doing this by delivering “smarter” EV chargers. According to the company, Volta’s charging stations are “media enabled,” and “match the behavior and commerce of visitors to its host sites.”
What does that mean, exactly? Looking into the matter further, we might detect an additional revenue stream for Volta.
That’s because Volta’s charging ports “allow media partners that advertise on the charging stations’ digital displays to reach consumers at their point of entry to retail and other locations.”
To me at least, this sounds like a double-edged sword. Sure, Volta may be able to capture some revenues from ad dollars on its chargers. On the other hand, the end users might find the ads to be annoying.
Reaching a Milestone
Only time will tell whether the users will accept and embrace these supposedly data-driven EV chargers. However, we can say with confidence that Volta’s charging ports are already seeing heavy use.
In fact, the company announced that Volta’s network of charging stations has delivered 100 million electric miles to EV drivers in the U.S. Plus, here’s an interesting piece of trivia: none other than famous actor Leonardo DiCaprio is an investor in Volta.
In DiCaprio’s words, reaching the 100-million-mile mark “shows Volta has been building the infrastructure that will be an instrumental component of a broad transition to electric vehicles.”
On the financial front, Volta reported that in 2021’s third quarter, the company’s revenues increased 77% year-over-year to $8.5 million.
I can’t confirm that DiCaprio’s involvement with Volta helped the company to achieve those results, but it probably didn’t hurt.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, VLTA is a Strong Buy, based on three unanimous Buy ratings. The average Volta price target is $14, implying 72.41% upside potential.
The Takeaway
It will be interesting to find out whether Volta’s unique charging stations gain further traction within America’s expanding charging-port network. The road to niche-market dominance won’t be easy, as Volta has stiff competition.
Nonetheless, VLTA stock remains an intriguing – though quite volatile – picks-and-shovels wager on essential EV infrastructure.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
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