MULN - Why Is Canoo (GOEV) Stock Up 12% Today?
2024-01-08 11:42:53 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
One company that many people wrote off seems to be making a comeback. Electric vehicle (EV) startup Canoo (NASDAQ: GOEV ) spent last year on a steady downward trajectory, falling well below $1 per share. Heading into 2024, most experts weren’t touting Canoo as a likely breakout stock, either. But last week, a highly bullish price target from Wedbush analyst Dan Ives — one of the EV sector’s biggest bulls — sent GOEV stock surging. Now, the company has given investors even more reason to be optimistic about its growth prospects, with new manufacturing assets helping to further its production capacity at its Oklahoma City facility.
Shares are rising steadily today on news of this recent purchase. But does the development mean Canoo is primed for the kind of growth predicted by Ives? Let’s take a closer look.
What’s Happening With GOEV Stock?
Despite starting the week off with positive news, GOEV stock is already retreating from the 30-cent high shares saw this morning. As of this writing, shares are now up about 12% for the day, trading for around 27 cents per share.
That said, today’s news isn’t just about Canoo increasing its manufacturing capacity. Reportedly, the company has purchased these new assets at “dramatically reduced” costs. Per a statement released by the company:
“Canoo purchased a cache of manufacturing assets, from robotics to controls processing equipment that will be used to build vehicle cabins. As Canoo scales manufacturing to make additional customer deliveries in 2024, the company is continuously exploring ways to acquire high-value equipment at reduced prices through alternative routes. Canoo purchased the assets at a discounted price of over 80 percent of estimated value.”
Having the ability to scale production further certainly stands to benefit Canoo in the coming year. But even with Ives’ positive outlook, investors should consider the company’s troubled history. In December 2023, InvestorPlace contributor Ian Bezek argued that Canoo has never found an effective business model. At the time, Bezek didn’t think GOEV stock was worth a gamble at 25 cents per share.
Indeed, despite recent growth, Canoo still faces a difficult road ahead as it scrambles to prove to investors that it shouldn’t be counted out. Of course, GOEV is probably a better bet than struggling EV peer Mullen Automotive (NASDAQ: MULN ), but that’s a low bar to beat. Until the company sees real commercial traction, increased manufacturing capacity likely won’t mean much, either.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
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