We recently compiled a list of the 8 Most Undervalued EV Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Niu Technologies (NASDAQ:NIU) stands against the other undervalued EV stocks.
In 2024, the worldwide EV (electric vehicle) market value was roughly $1.32 trillion, as reported by Grand View Research, and it is expected to expand at a CAGR 32.5% between 2025 and 2030. Worldwide governmental rules and rewards are boosting EV sales. Numerous nations enact strict pollution laws and give rebates, tax cuts, and other benefits to buyers and producers, which pushes a change from gas-powered cars to electric ones. Furthermore, battery tech gains are improving EV range, power, and cost. New ideas like solid-state cells and better lithium-ion cells cut costs and boost energy storage, thus making EVs more attractive.
The EV sector navigated a turbulent 2024 due to macroeconomic pressures. Tradu recently reported that elevated inflation and surging interest rates globally constricted consumer spending, particularly on high-value items like EVs. This economic strain translated into a noticeable deceleration in battery electric vehicle (BEV) sales across key markets, notably Europe and the US. In Europe, BEV registrations experienced a decline, while hybrid vehicle sales surged. This reflected a consumer shift towards more affordable and range-extended options. The US market, while still growing, witnessed a slowdown compared to the previous year’s expansion. China, however, grew, with new energy vehicle (NEV) sales, which included BEVs, plug-in hybrids, and fuel cell vehicles, and surpassed 50% of total sales. This regional disparity underscored the varied pace of EV adoption worldwide.
Entering 2025, the EV industry anticipates a year of transition, marked by both challenges and opportunities. A risk lies in potential policy shifts, particularly in the US, where a change in administration could jeopardize existing EV incentives and regulations. The potential repeal of the federal tax credit, for instance, could impact EV affordability and demand. Furthermore, trade tensions, especially between China and Western nations, pose hurdles to market access. Increased tariffs and import restrictions could disrupt supply chains and limit consumer choice. However, there’s optimism for improved macroeconomic conditions. As inflationary pressures subside and central banks begin to lower interest rates, EV affordability is expected to improve. Moreover, the long-term trajectory towards electrification, driven by emission regulations and industry investments, appears irreversible.
A pivotal factor influencing EV adoption in 2025 will be the introduction of more affordable models. Recognizing the need to expand their customer base, major automakers are developing sub-$30,000 EVs. Chinese manufacturers, using their cost advantages and established supply chains, will play a role in this segment and offer competitive pricing and a wider range of models. The availability of affordable EVs is expected to be a major catalyst for market growth. Additionally, the advancements in autonomous driving technology are anticipated to revive the EV sector. While regulatory hurdles and safety concerns remain, 2025 could witness accelerated deployment of autonomous driving features. This will enhance the overall user experience and expand the potential applications of EVs. The convergence of electrification and autonomy will reshape the automotive landscape and drive innovation.
Our Methodology
We sifted through online rankings and stock screeners to compile a list of the top EV stocks that had a forward P/E ratio under 20. We then selected the 8 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An avid cyclist riding a sleek electric motorcycle on a rugged city street.
Niu Technologies (NASDAQ:NIU)
Forward P/E Ratio as of March 7: 6.42
Number of Hedge Fund Holders: 5
Niu Technologies (NASDAQ:NIU) specializes in electric mobility and designs, manufactures, and distributes a range of EVs. Operating under the NIU brand, the company offers smart electric scooters, motorcycles, bicycles, and kick-scooters, alongside accessories, spare parts, and related services. All of these are supported by its proprietary Niu Technologies (NASDAQ:NIU) app.
In Q3 2024, the company’s total EV sales reached 312,000 units, which was a 17.5% year-over-year increase. Sales within China grew by 12.4% to 259,000 units, while overseas sales surged by 50% to 53,000 units. This growth was driven by the launch of several new EV models in 2024. These include premium electric motorcycles like the NX Hyper and NX Ultra. Such new models contributed to over 50% of total units sold in 2024. This resulted in an overall Q3 revenue of RMB 1.02 billion, which was a 10.5% year-over-year increase. For Q4, the company projects a revenue between RMB 622 and 718 million, which indicates a 30% to 50% improvement.
The company is expanding its overseas presence, particularly in the micro-mobility segment. In the US, partnerships with major retailers have expanded distribution for its kick scooters, like the KQi 100 series. In Europe, the company is focused on direct sales and expanding its dealer network. It aims to double the number of dealers by mid-2025. New EV models, which include the NX and SQi series e-motorcycles, are being introduced to the European market.
Overall NIU ranks 7th on our list of the most undervalued EV stocks to buy according to hedge funds. While we acknowledge the potential of NIU as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NIU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
