Beam Global (BEEM 28.75): “Running Low on Battery”
By: Jacob
Kello, AIM Student at Marquette University
Summary
- Beam Global (BEEM, 28.75) offers plug-and-play solution for modern energy problems. The company currently has two product offerings: the EV Arc, which is the only 100% renewable, transportable, and off-grid EV charging station on the market, and the Solar Tree, which offers charging solutions for medium and heavy-duty electric vehicles.
- The company receives 100% of its revenues from the United States, ad relies heavily on government contracts to sell its products. BEEM operates out of San Diego, CA.
- Since being added to the portfolio, the stock has dropped from $48.44 to $28.75. The target price for the stock was $104.59. The 52-week beta for this stock is 2.8, representing an extremely high volatility that has yet to provide any upside.
- The AIM Small Cap Domestic fund should sell its position in Beam Global as it continues to decrease in value.
KEY POINTS
In the year 2020, the
global electric vehicle (EV) market size was valued at $246.74 Billion, which
was down 9.7% from 2019 due to the global COVID-19 pandemic. However, Fortune
Business Insights, a company which specializes in the research of sectors,
projects that by 2027, the EV market will grow to 985.72 billion USD which
represents a CAGR of 17.4%. In unit terms, the global EV market demand was
estimated at 8.5 million vehicles in 2020 and is projected to reach 116 million
units by 2030 according to Bloomberg New Energy Finance. Demand for EV’s
clearly exists and is being met by newer EV companies and some traditionally
internal-combustion engine auto companies which are now producing more EV
lines. While the demand for Electric vehicles clearly exists, the demand for
public charging stations has stalled due to slow-moving infrastructure bills,
and the Biden Administration’s climate agenda no longer being a part of the
bill. This unfortunately has some not-so-great implications for a stock in the
AIM Small Cap Domestic Fund—Beam Global.
The most important driver of
earnings for BEEM was its GSA MAS contract with the federal government that
allows federal institutions to purchase EV Charging products specifically from
BEEM Global. At the beginning of the new presidency, the Biden administration
also had committed to deploying over 500,000 EV charging stations by 2030. This
commitment was clearly contingent on a climate-centric infrastructure bill, and
it was very recently announced that the administration’s climate agenda will be
completely removed from the bill due to opposition within the democratic party
coming mainly from West Virginia Democratic Senator Joe Manchin.
The company has yet to turn a
profit, and it doesn’t look like it will by 2025 which is when it was projected
to turn a profit when it was bought by the fund. Even with the levelized cost
of energy for photovoltaic solar being the lowest it has ever been and
continuing to decrease, materials costs to produce solar panels and batteries
have continually increased which obviously hurts a company that relies on solar
power storage to charge electric vehicles.
What has the stock done lately?
Recently, the stock has been
fairly stagnant. Since May of 2021, the stock has continuously above and below
$30, and since adding the stock to the Small Cap Domestic Fund, it has gone
down by 40.65%. On October 7th, the company released news that they
had received an order from the United States Marine Corps to purchase EV Arc
and energy resiliency systems for 14 of their bases, and the per share price
only rose 2.4% by the end of the week. This stock is stagnant, and will
continue to be stagnant unless the infrastructure bill includes climate
provisions which is looking unlikely.
Past Year Performance
BEEM has fallen 61.03% YTD and over a
52-week period has increased by 85.01%. The 52-week high-low for AMRC is 14.15
– 75.90. The 52 week beta for Beam Global is 2.8, representing very high
volatility in comparison to the market.
My Takeaway
The investment thesis for BEEM global
has yet to pan out and does not look like it will anytime soon. The upside for
BEEM was heavily dependent on their GSA MAS contract with the federal
government, and that contract was also dependent on the infrastructure bill
that congress was expected to have passed long ago. Also, with Senator Joe
Manchin stalling any action in regards to a climate bill, it is not expected
that the most important driver for this stock will pan out anytime soon. With
that being said, it is recommended that BEEM should be sold and taken out of
the AIM Small Cap Domestic Fund.
