Investors love a good story and right now the best page-turner in town concerns the positive developing narrative of the electric vehicle (EV) space.
This is a secular trend that already had a captive audience before President Biden signed the $1.2 trillion infrastructure bill into law, but the sector is now enjoying an extended moment, and Canoo (GOEV) stock appears to be riding the wave.
It also helps that unlike other EV startups which have been embroiled in controversy and have encountered production delays, Canoo has actually pulled forward the production of its first offering, an electric passenger van titled the Lifestyle Vehicle (LV). The company will now kick off production in 4Q22 instead of in 2023.
In other good news, Canoo has chosen Arkansas as the location for its headquarters and R&D facility. The company also plans on adding extra facilities near the site of its under-construction Oklahoma factory. These sites are strategic choices which come with state-sponsored incentives of around $100 million, on top of the $300 million the company has already been granted in Oklahoma.
H.C. Wainwright's 5-star analyst Amit Dayal believes the company's ownership of manufacturing assets “should prove to be an important differentiator relative to competitors who may be reliant on outsourcing vehicle manufacturing.”
Dayal expects gamma testing to be completed by mid-2022, which at that stage will bring the vehicles to within 80-98% of “readiness levels” compared to the final product. “We believe gamma test completion could be an important catalyst for the stock as it allows Canoo to move to production and customer sales,” Dayal noted.
Talking of sales, Dayal expects 800 vehicles to be sold in 2022, with a big jump to 13,500 in 2023. This will also send revenues up from $34.1 million in 2022 to $576.5 million the following year. By 2030, Dayal expects revenue to hit $7.2 billion at a seven-year CAGR of roughly 43.3%.
To this end, the H.C. Wainwright analyst rates GOEV a Buy and sees shares adding ~62% of muscle over the coming months, given his price target stands at $15. (To watch Dayal’s track record, click here)
Not everyone is quite as confident in Canoo’s success; 3 other analysts have posted recent reviews and they are split across the spectrum; with an additional 1 Buy, Hold and Sell, each, the analyst consensus rates this stock a Hold. However, the average price target shows the bulls remain in control; at $11.50, the figure implies a 24% upside from current levels. (See Canoo stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.