Canoo Inc. (GOEV) is our foray into the fast-growing electric vehicle (EV) market, explains Bryan Perry, editor of Micro-Cap Stock Trader — and a participant in The MoneyShow Orlando, October 30 to November 1. Register here.
The company stands to benefit greatly from the Inflation Reduction Act, in which large tax credits will go to buyers of personal and professional EVs.
Canoo has signed a definitive deal with Walmart (WMT), which agreed to purchase 4,500 units, beginning with the lifestyle delivery vehicle. The pact also gives Walmart an option to purchase up to 10,000 last-mile vehicles. Walmart paid for its $300 million purchase up front and has warrants to purchase 61.2 million shares at $2.15 each.
Jaime Perez, an analyst at R.F. Lafferty, placed a “Buy” rating on Canoo shares, as of Aug. 9. The analyst also put a $15 price target on the stock. As of Aug. 12, CEO Tony Aquila held 51.2 million shares of Canoo common stock, making him the largest individual shareholder.
On Sept. 23, Stifel initiated GOEV with a “Buy” recommendation. Analyst J. Bruce Chan revealed fresh coverage with a favorable recommendation. In terms of compact SUVs, pick-up trucks, and last-mile deliveries, he said the company focuses on “the most profitable automotive market sectors,” which makes the stock a compelling growth story.
Chan believes that its broad emphasis sets it apart from the competitive EV industry. He claimed that Canoo was trying to “extract value across the whole vehicle lifecycle, significantly different from peers and entrenched OEMs.”
The analyst adds, "Given a seasoned management team conveying a clear focus on high-growth areas, in our view, we view the company favorably.” Through direct sales to retail customers and business fleets, the company’s strategy “targets both the B2C and B2B markets.”
“Canoo's modular architecture and modular manufacturing strategy should yield lower cost relative to peers, as well as faster future vehicle development that should allow the company to capture share at this critically early stage in the electric vehicle market, in our view.”
Meanwhile, the E-Bike market is estimated to be at least $1.2 billion. Not everything EV has to be on four wheels. Two-wheel delivery and consumer use are just getting started. Buy Canoo Inc. at market.
