Electronic vehicle (EV) charging network Volta NASDAQ: VLTA
stock surged after completing its reverse merger with Tortoise Acquisition Corp. II on Aug. 25, 2021. Shares initially sold off after the business combination starting trading under the new symbol as most special purpose acquisition companies (SPACs)
. However, shares were able to nearly double off those lows, unlike most SPACs. Volta charging stations are located in populated desirable locations where consumers leave their EVs to charge
while they are shopping. This is super appealing to advertisers. They are not located in rural areas like other charging networks. The combination of targeted high-end demographics, location, and expansion are growth drivers that Volta expects will generate up to $1.4 billion in revenues by 2025. The spread of COVID vaccinations
has enabled consumers and worker
to in-person engagements and more cars on the road. Volta expects to ride this wave in the new normal driven by advertising revenues. Prudent investors seeking a niche EV charging play can watch for opportunistic pullbacks in shares of Volta.
The EV charging stocks have not performed well after starting 2021 with frenzy like buying in charging stocks like ChargePoint NYSE: CHPT, Blink Charging NASDAQ: BLNK and Beam Global NASDAQ: BEEM. The collapse of the SPAC and EV bubble caused these stocks to lose nearly 70% or more of their values as none of them are profitable, despite the growth prospects. While its shares went public near the bottom of the SPAC collapse, investors ponder whether it will share the same fate as its competitors. What differentiates Volta is its already built out the most utilized EV charging network in the U.S. with its strategically located “freemium” stations at supermarket shopping parking lots like Kroger’s Giant NYSE: KR and Amazon owned Whole Foods NASDAQ: AMZN grocery stores. The Company offers its charging for free for the first 30-minutes. Rather to relying on selling electricity, it collects advertising fees from advertisers utilizing their large-screen displays. EV owners are a high-earning much sought-after consumer demographic that is appealing to advertisers. The success of this model was underscored by the 35% sales spike for advertiser Tolerant Foods. Volta’s charging stations are 100 times more utilized than competitor Electrify America. It’s expected to grow from a network of 1.5K charging stations to over 26,000 shares in 2025, which is a 77% compound annual growth rate (CAGR) at which point the Company expected to generate $1.4 billion in revenues.
The Company also plans to include Europe as part of its expansion plans utilizing the same advertising-supported EV stations. The benefit of this is that Europeans are more familiar with EVs which have a much higher penetration than the U.S. Currently, the Company is only located in 23 states in the U.S., but plans to continue expanding in the U.S. and abroad in Europe to drive growth.
VLTA Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides the near-term perspective of the playing field for VLTA stock. The weekly rifle chart peaked near the $14.39 Fibonacci (fib) level. The weekly rifle chart is uptrending with a rising 5-period moving average (MA) support at $10.59 and upper Bollinger Bands (BBs) at $12.44. The weekly stochastic has a mini pup oscillation up through the 50-band. The daily rifle chart forms a 60-minute market structure low (MSL) buy trigger above $11.62. The daily market structure high (MSH) sell triggers on a breakdown below $11.05. The daily upper BBs are rising at $14.89 but the 5-period MA is stalling at $12.39 as stochastic falls lower to set up a make or break. Bull case is for the stochastic to cross back up and shares spike up through the daily 5-period MA towards the daily upper BBs. Bear case is for the stochastic mini inverse pup to cause the 5-period MA crossover down through the 15-period MA for a breakdown towards the lower fibs. Prudent and risk-tolerant investors can watch for opportunistic pullback levels at the $11.47 fib, $11.05 daily MSH trigger, $10.49 fib, $10.05 fib, $9.74 fib, $9.42 fib, and the $8.72 fib. The upside trajectories range from the $15.31 fib upwards to the $17.94 fib.
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