With Wall Street warming up to Electrameccanica Vehicles (NASDAQ:SOLO) and the car maker indicating that the demand for its three-wheeled vehicle has been strong, I continue to recommend that longer-term investors buy SOLO stock.
In recent weeks, a number of research firms have issued glowing notes on SOLO stock. And in a presentation at a conference earlier this month, Electrameccanica’s CFO suggested that the company has plans to greatly expand and become profitable down the road.
Analysts Upbeat on SOLO Stock
Stifel analyst J. Bruce Chan started coverage of Electrameccanica on Dec. 15 with a $9 price target and a “buy” rating. He expects the company’s “compound annual sales growth to exceed 25% in both the passenger and commercial electric vehicle segments over 10 years,” according to The Fly. Electrameccanica has created “a defensible niche in the underserved commuter EV market,” explained Chan.
Meanwhile, in his Dec. 22 column on SOLO stock, InvestorPlace contributor David Moadel noted that Roth Capital was enthusiastic about Electrameccanica’s potential in the fast-food delivery market. Specifically, Roth contended that ” The SOLO’s 100-mile range, low operating cost, and std telematics make the vehicle a good fit” for “fast-food delivery,” according to proactive. And Roth suggested that Electrameccanica could announce “a couple” deals with major chains in the sector sooner rather than later.
Raising its price target on SOLO stock to $12.50 from $7.50 and maintaining a “buy” rating on the shares, Roth added that Electrameccanica has been hiring “seasoned EV professionals” who’ve worked for top-notch automakers, “including Tesla (NASDAQ:TSLA) and General Motors (NYSE:GM).” Finally, the firm expects Electrameccanica’s backlog to grow.
Also issuing an upbeat note recently on Electrameccanica was Colliers, which initiated coverage of the shares on Dec. 16 with a “buy” rating and a $7.50 price target.
CFO’s Bullish Comments
In a virtual presentation for an investors’ conference on Dec. 15, CFO Bal Bhullar said that the company is “continuing to expand its retail footprint along the West Coast” and expects to open additional West coast retail kiosks from California to Washington. The company then plans to “slowly move thorough the Sunshine States and into the East Coast,” she added.
Further, on one of Bhullar ‘s presentation slides, the company reported that the SOLO would “ultimately be available throughout the world, with key markets in Europe and Southeast Asia.” I believe that all of these ambitious statements indicate that orders for the SOLO are rapidly growing.
Further, in her Dec. 15 presentation, the CFO featured a section focusing on the company’s “path to profitability.” Among the methods that Bhullar cited as means that the company could use to enter the black were ramping up production to recover a greater percentage of fixed costs and reduce the cost of parts, and building a factory in the U.S. to avoid American tariffs and gain greater control of its supply chain.
Electrameccanica intends to build another “iteration of the SOLO,” in order to transform “it into a global vehicle,” she noted.
I’ve viewed two previous presentations about Electrameccanica by Bhullar, and I don’t recall her making such a statement previously. I think the disclosure suggests that the company is making more detailed, serious plans to offer the Solo outside of North America.
Finally, she noted that the SOLO could be used by enterprises to deliver many products and services including package deliveries, utility services, municipal services, and, of course, food.
The Bottom Line on SOLO Stock
The analysts’ bullish comments indicate that the Street is becoming more upbeat on Electrameccanica, while Bhullar’s positive, ambitious statements suggest that the company itself is very pleased with the demand for the Solo.
On the date of publication, Larry Ramer held a long position in Electrameccanica.
Larry has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.