Shares of Canoo Inc. have experienced a significant decline recently, reaching record-low levels. However, Wedbush analyst Dan Ives sees great potential in the electric-vehicle maker, particularly in the current last-mile delivery market. Canoo’s existing partnerships with major companies like Walmart Inc., along with an order book exceeding $3 billion and over $750 million in committed orders, position them as a disruptive player in the Class 1 vehicle market. These Class 1 vehicles are specifically the delivery vans manufactured by Canoo.
Ives, in his note to clients, initiated coverage of Canoo’s stock (GOEV) with an outperform rating. He has set a 12-month price target of $4, projecting a staggering 1,788% upside from the current levels over the next year.
Amidst these positive developments, Canoo’s stock witnessed a slight decrease of 0.7% in midday trading on Friday. This decline follows a close at a record low of 21.3 cents on Thursday, which reversed an earlier gain of up to 12%. Importantly, the stock has remained below the $1 level since February 9, 2023.
Canoo entered the public market on December 21, 2020, following its merger with special-purpose acquisition company Hennessy Capital Acquisition Corp. IV. On its first day of trading, Canoo’s stock closed at $18.89.
Although Canoo is still in its nascent stage of growth, it warrants attention as it competes for market share in the thriving EV manufacturing industry. This unfolding growth story holds promise for Canoo as it navigates the future.
The Growing Last-Mile Delivery Market: Canoo’s Potential
The last-mile delivery transportation market is poised for remarkable growth in the coming years. According to industry expert Ives, this market in the U.S. is predicted to reach an astonishing $425 billion by 2030. With a compounded annual growth rate of around 35% through 2040, driven by the increasing demand for electric vehicles (EVs), the opportunities are immense.
Canoo, a key player in this evolving landscape, is well-positioned to capitalize on this lucrative market. Industry analysts like Ives believe that the current climate is in favor of Canoo. With the potential of a $5 trillion EV market looming over the next decade, the auto industry is experiencing one of its most significant transformations since the 1950s.
However, despite the optimism surrounding Canoo, it is important for buyers to exercise caution. The company’s audited quarterly and annual filings since Q1 2022 have included warnings about its ability to continue as a going concern. They have expressed doubts about their capacity to sustain operations unless they secure sufficient additional funding or access to capital.
Canoo’s stock has experienced a substantial decline of 82% over the past year. In contrast, the Global X Autonomous & Electric Vehicles exchange-traded fund has seen a 17% increase, and the S&P 500 index has advanced by 23.3%.
In conclusion, while Canoo shows promise in the fast-growing last-mile delivery market, potential investors should carefully consider the risks and uncertainties associated with the company’s financial position.