Faraday Future Intelligent Electric Inc. (FFIE) designs, develops, manufactures, engineers, sells, and distributes electric vehicles and related products in the United States and internationally.

On August 23, 2022, FFIE announced a joint partnership with Gameloft, a leader in creating and developing games.

Page Beermann, FFIE’s Design Director, said, “We’re excited to partner with Gameloft and include our FFZERO1 concept car in one of the most popular mobile racing games, Asphalt, and provide all enthusiasts with an opportunity to experience a glimpse into our design and engineering vision.”

However, recently FFIE and its board members Susan Swenson and Brian Krolicki were sued by a major investor over squandering $4.40 billion in market value.

Over the past month, FFIE has lost 40.7% to close the last trading session at $0.89. It has lost 83.3% year-to-date and 91.3% over the past year.

Here is what could shape FFIE’s performance in the near term:

Weak Financials

For the second quarter ended June 30, 2022, FFIE’s operating loss came in at $137 million, up 389.3% year-over-year. Its net loss came in at $142 million, up 167.9% year-over-year. Moreover, its total assets came in at $588 million for the period ended June 30, 2022, compared to $706.06 million for the period ended March 31, 2022.

Stretched Valuations

FFIE’s forward EV/Sales of 7.47x is 630.2% higher than the industry average of 1.02x. Its forward Price/Sales of 8.05x is 911.7% higher than the industry average of 0.80x.

Poor Profitability Ratios

FFIE’s trailing-12-month ROTC and ROTA of negative 160.22% and 116.11% are lower than the industry averages of 6.91% and 5.09%, respectively. 

POWR Ratings Reflect Bleak Prospects

FFIE has an overall rating of F, equating to Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.  

FFIE has an F grade for Value and Quality, consistent with its higher-than-industry valuation multiples and poor profitability ratios.

In the 64-stock Auto & Vehicle Manufacturers industry, FFIE is ranked #57. The industry is rated D.

Click here for the additional POWR Ratings for FFIE (Growth, Momentum, Stability, and Sentiment).  

View all the top stocks in the Auto & Vehicle Manufacturers industry here.

Bottom Line

The company witnessed a declining bottom line in its last reported quarter. Moreover, FFIE’s EPS is estimated to fall 3.8% year-over-year to negative $1.63 in 2022 and is expected to remain negative in 2023. Furthermore, it missed EPS estimates in all four trailing quarters. Given FFIE’s stretched valuations and poor profitability, I think it might be best avoided now.

How Does Faraday Future Intelligent Electric Inc. (FFIE) Stack Up Against its Peers? 

While FFIE has an overall POWR Rating of F, one might consider looking at its industry peers, Stellantis N.V. (STLA), Volkswagen AG (VWAGY), and Subaru Corporation (FUJHY), which have an overall A (Strong Buy) rating, and Hyundai Motor Company (HYMTF), which has an overall B (Buy) rating.

FFIE shares were trading at $0.82 per share on Wednesday afternoon, down $0.08 (-8.43%). Year-to-date, FFIE has declined -84.59%, versus a -21.55% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

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