Canoo Analyst Remains Bullish While Investors Punish The Stock On Disappointing Outlook

Canoo Inc GOEV shares were tanking in early trading on Tuesday after the company issued weak 2024 revenue guidance. In early March, the company had announced a 1-for-23 reverse stock split.

The company was following a “prudent” approach to scale its manufacturing while building resiliency in its supply chain, according to H.C. Wainwright & Co.

The Canoo Analyst: Amit Dayal maintained a Buy rating for Canoo while raising the price target from $3 to $7.

The Canoo Thesis: The company reported its fourth-quarter revenues at $0.4 million, with an adjusted EBITDA loss of $54.0 million, versus $60.7 million in the year-ago quarter, Dayal said in a note.

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“The company’s 2024 revenue guidance of $50[M]-100M implies production of roughly 1,000-2,000 vehicles during the year; we believe management is targeting quarterly production levels of 4,000-5,000 by mid-2025,” the analyst wrote. “During the last few months, the company has taken steps that position the company for long-term profitable execution,” he added.

The change in price target reflects the 1-for-23 reverse stock split, investments from foreign strategic institutional investors, and “other advances against the Pre-Paid Advance Agreement (PPA),” Dayal further stated.

GOEV Price Action: Shares of Canoo had declined by 26.64% to $2.84 at the time of publication on Tuesday.

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Photo: Courtesy Canoo