What happened
Shares of Arcimoto (NASDAQ: FUV) climbed 721.7% last year, according to data from S&P Global Market Intelligence. Electric vehicle (EV) stock has soared thanks to the company’s dramatic sales gains and incredible momentum from the industry as a whole.
FUV data by YCharts
2020 has been a huge year for electric vehicle stocks, with big companies such as You’re here and NIO posting incredible stock market gains across the board. Some smaller space players have also posted dramatic stock price gains, and Arcimoto closed last year as one of the stock market’s biggest gainers.
Image source: Arcimoto.
So what
Arcimoto’s 2020 stock gains look even more impressive against the backdrop of the company diluting stock through new stock offerings. The company’s outstanding shares soared about 39% last year and its market capitalization jumped about 1,810%.
The rise of the company led to a series of analyst upgrades and dramatic jumps in the company’s share price. The biggest increase in electric vehicle inventory came in November after the company released third-quarter results that crushed market expectations. Sales for the period reached $683,895, up approximately 1,953% year-over-year.
The company’s loss in the third quarter during the period increased from $4 million in 2019 to $4.6 million in the quarter last year, but the increase was insignificant in the context of the massive increase in revenue, and the company closed the quarter with $17 million in cash and short term. – forward equivalents (up from $5.8 million in the prior year period) due to proceeds from new equity issues.
Now what
Arcimoto stock continued to post strong gains in early January trading. The company’s stock price is up about 18% in the month so far.
FUV data by YCharts
The electric vehicle market looks poised for strong long-term growth, and Arcimoto is still small enough that it could continue to deliver stellar stock gains if the company manages to keep growing its business. However, investors should also keep in mind that publicly traded electric vehicle companies have posted incredible stock gains that raise concerns about whether valuations have stretched unreasonably.
Arcimoto has a market capitalization of around $532 million and is valued at around 24 times expected sales for this year.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.
