3 EV Stocks That Could Be Multibaggers in the Making: February 2024 Edition

Stocks to buy

The electric vehicle (EV) market is likely headed toward a slump in 2024. Interest rates remain elevated, and the Federal Reserve does not want to be hasty about cutting them either. Moreover, despite the economy performing better than many had predicted, consumer sentiment remains below where it was before the pandemic. Despite this, there are good reasons to invest in reasonably valued EV stocks.

These companies are trading at relatively cheap multiples, but their value proposition remains intact as secular trends push consumers to electric vehicles. These stocks are not just manufacturing EVs but are also playing a role in making the key electronic components that go into them or are involved in charging infrastructure.

Without further ado, three EV stocks could be multibaggers in the making.


Source: shutterstock.com/Trygve Finkelsen

BYD‘s (OTCMKTS:BYDDY) growth in China and abroad appears unmatched at this point in time. Last year, BYD became the world’s top EV maker in 2023, trouncing its American rival Tesla in electric vehicle sales. In Q4 2023, BYD sold 526,409 electric vehicles, while Tesla sold 484,507. Despite an EV slowdown, BYD is still increasing its sales year-over-year. In particular, in January 2024, the company sold 205,588 electric vehicles, up 33.1% Y/Y but down more than 34% monthly. The Chinese EV maker was not the only large electric vehicle company to report a month-over-month decline in sales growth.

Still, the Chinese EV giant’s growth cycle hasn’t peaked yet. BYD has partnered with Qatar-based dealership Mannai to introduce BYD’s electric vehicles into the market. The company is also fleshing out partnerships to increase brand awareness in Europe.

BYD, now larger than Tesla in EV sales, only trades at 14.4x forward earnings, which could present a great opportunity for interested investors.

ON Semiconductor (ON)

Source: Shutterstock

ON Semiconductor (NASDAQ:ON), or “Onsemi,” is a leading provider of power management, analog, sensors and connectivity semiconductor devices. Due to its wide range of products, the chipmaker serves diverse end markets, including industrial and consumer electronics. However, as electric vehicle (EVs) smart connectivity devices have become more mainstream, Onsemi has recently focused on developing power-efficient semiconductor solutions for EV semiconductor devices.

The semiconductor firm’s exposure to consumer electronics and IoT end-markets has caused a slowdown in top-line growth as there has been a general pullback in consumer spending on electronics since the height of the pandemic. Onsemi’s sluggish quarterly revenue growth in 2023 reflects this recent spending dynamic. This could be set to change in 2024. While EV demand may wane, consumer electronics and IoT demand could rebound. In its Q4 earnings report, TSMC (NYSE:TSM) stated it expected the contract manufacturer to return to growth in 2024.

Moreover, while an EV slump may occur, Onsemi’s electric vehicle segment could be a bright spot in the coming years as consumers increasingly consider electric vehicles over combustion engine vehicles.

In particular, its valuation could drive ON’s shares in the short term. ON shares are trading at only 18.3 times forward earnings, which puts the company’s valuation below many of the semiconductor giants we read the usual headlines.

Allego N.V. (ALLG)

Source: szmuli / Shutterstock.com

Founded in 2012, Allego (NYSE:ALLG) is a Netherlands-based EV-charging company offering solutions for electric cars and heavy-duty vehicles such as buses and trucks. In essence, Allego provides charging solutions for private businesses to create EV charging infrastructure for consumers. Thus far, Allego has amassed a vast charging network of over 34,000 charging points across Europe. To help its customers service the Allego charging stations, Allego also offers an EV Cloud Platform.

Also, ALLG reported an impressive Q3 print in mid-November. In particular, revenue increased 28.2% to €28.6 million ($30.2 million), compared to € 22.39 million ($21.8 million) YOY. Moreover, as of October, Allego recorded over 1 million monthly sessions across its charging network. Toward the end of November, Allego also reported a successful pilot test of its charging station geared toward EV trucks and other heavy-duty vehicles to expand its horizons.

The company’s E.U.-focus on building electric vehicle infrastructure sets it apart from other charging networks and could lead to extraordinary success as the region adopts new energy products.

On the date of publication, Tyrik Torres 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.

Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.

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