Urban mobility stocks are positioned to continue to deliver strong gains for investors. These companies are reasonably priced, and analysts expect them to be strong future performers.
If you are looking for the best urban mobility stocks to buy, look no further. In this article, I’ve covered three articles that represent the best value for money based on a mix of their financials and forward-looking estimates.
Here are the best urban mobility stocks that will keep your portfolio moving.
Tesla (NASDAQ:TSLA) is one of my favorite picks from these urban mobility stocks. It’s a somewhat contentious choice since bears will point to its rich valuation and softer delivery numbers as a way to question its investment potential.
However, TSLA offers great value for money, and its share price has benefitted from a few key benefits over the short term.
The first reason is that the market may have under-reacted to Tesla’s cyber truck event, which was revealed last week. Amid the announcement, TSLA’s stock price didn’t move as much as expected. The cost of these vehicles is near the six-figure range. However, TSLA is also targeting the luxury and premium segment. Frankly, it wouldn’t make sense for the futuristic cyber truck to target anything else.
Some analysts also expect TSLA to deliver around 78,000 of these trucks next year, which shows that significant demand could still exist despite its price point. This development might be partially priced into TSLA, leaving investors with an upside.
I’m impressed by Uber’s (NYSE:UBER) ability to maintain its competitive moat from rivals despite an influx of ride-hailing and ride-sharing apps over the last few years. In many parts of the world, “catch an Uber” has entered common parlance, similar to “Google it.” UBER’s first-mover advantage is, therefore, still apparent.
UBER is also building on its its longstanding moat, as speculation was confirmed today that the company will officially join the S&P 500. Bulls have jumped at the news to scoop up new shares, as it’s currently up 4% pre-announcement. Recognizing UBER in the S&P 500 helps keep the sentiment positive and current investors board.
Despite UBER’s share price rally, I still feel it has plenty of fuel left in the tank to surge higher. Wall Street’s analyst consensus rating for the stock is strong buy, and its growing free cash flow of $2.29 billion supports this outlook.
Nio (NYSE:NIO) is my risky contrarian pick among these urban mobility stocks. This company isn’t nearly as popular as TSLA, and there have been some concerns about the high price tag of some of its electric vehicles.
I agree that these concerns are valid. When I think of NIO, I think of value for money, not high-end luxury. It is difficult to convince the broader market that NIO is worth as much as a TSLA, whose positioning makes sense for commanding a higher dollar amount as a vehicle made in the U.S.
Still, NIO is showing strength in areas where TSLA is struggling. Specifically, NIO reported that its deliveries increased by 12.6% year-over-year this week, with 15,959 vehicles delivered.
On a relative basis, NIO is also considerably less expensive than its rival TSLA. For instance, the company’s price-to-sale ratio is just 1.90 compared to TSLA’s 7.91 – almost four times higher. The company’s market cap is also just $12.72 billion to TSLA’s $759.22 billion.
So, if we use the P/S ratio as a proxy, is NIO four times riskier than TSLA? Although NIO is unprofitable, its strong sales growth doesn’t suggest this. Therefore, it could be a better value pick if investors want to maximize their risk-adjusted returns.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines