Founded in 2007, Arcimoto Inc. (FUV) designs, develops, manufactures, and sells three-wheeled electric vehicles (EVs). The company’s products include Fun Utility Vehicle, Rapid Responder and Deliverator.

FUV’s operations were halted temporarily amid the COVID-19 pandemic because its manufacturing and supply units had to be closed. However, the company has recovered and  resumed its operations. FUV recently reported a continuation of quarter-over-quarter net increases in pre-orders, which  the company is expected to fulfill in short order. Also, FUV has launched multiple high-visibility pilot programs of its vehicles.

Over the past year, the stock rallied 1310.6% to close yesterday’s trading session at $22.64.

FUV is focused on expanding to nationwide delivery in 2021 and scaling up to mass production in 2023. Investor optimism surrounding the company’s future growth along with  a number of other factors have helped the stock earn a Buy rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates FUV:

Trade Grade: A

FUV is currently trading above its 50-day and 200-day moving averages of $16.14 and $9.44, respectively, indicating an uptrend. Moreover, FUV has gained 52.9% over the past month, reflecting  solid short-term bullishness.

The company’s revenue for the third quarter ended September 30, 2020 increased 1953.1% year-over-year to $683,895. The gain was driven primarily by the resumption of vehicle production and customer deliveries, including 31 vehicles delivered in September. From the start of production in September 2019 to September 30, 2020, the company had produced 136 production vehicles, up from the 57 produced by December 31, 2019.

This month FUV announced that it had agreed to acquire Tilting Motor Works, which is the creator of the TRiO, the leading three-wheel conversion kit for touring motorcycles. Also this month, company joined the Zero Emission Transportation Association (ZETA), a national coalition of more than 40 businesses that are advocating for 100% electric vehicle sales by 2030.

Buy & Hold Grade: B

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers, FUV is well positioned. The stock is currently trading 11% below its 52-week high of $25.44, which it hit on January 26.

Leveraging its unique business model, the company’s net revenue grew at a CAGR of 295.6% over the past three years.

Peer Grade: C

FUV is currently ranked #35 of 55 stocks in the Auto & Vehicle Manufacturers industry. Other popular stocks in the auto & vehicle manufacturers group are Tesla, Inc. (TSLA), General Motors Company (GM) and Tata Motors Limited (TTM).

With a 1310.6% gain, FUV has comfortably beaten the returns of these popular industry participants over the past year. TSLA, GM and TTM have gained 636.8%, 51.7% and 48%, over the same period.

Note that GM is one of the few stocks handpicked currently in the Reitmeister Total Return portfolio. Learn more here.

Industry Rank: A

The Auto & Vehicle Manufacturers industry is ranked #24 of  123 StockNews.com industries. The companies in this industry manufacture and sell vehicles including  passenger cars, light trucks and motorcycles, among others.

While the production of vehicles was setback amid the pandemic, production has largely resumed now. Also, companies that have expanded in the EV space are expected to see  even greater demand in the near term because people are concerned about climate change and are opting for  EVs over traditional vehicles in growing numbers .

Overall POWR Rating: B (Buy)

FUV is rated Buy due to its short- and long-term bullishness, solid growth prospects, and underlying industry strength, as determined by the four components of our overall POWR Rating.

Bottom Line

FUV has already returned more than 71% so far this year, but still has plenty of upside based on its unique business model, continued business growth, and growing demand in the EV space.

Analyst sentiment, which gives a good sense of a stock’s future price movement, is good for FUV. It has an average broker rating of 1.58. Of 6 Wall Street analysts that rated the stock, 1 rated it Strong Buy and 3 rated it Buy. A  consensus revenue estimate of $21.55 million for 2021 represents  a 613.6% increase year-over-year. Its EPS is expected to grow 18.2% in 2021.

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FUV shares were trading at $22.17 per share on Friday afternoon, down $0.47 (-2.08%). Year-to-date, FUV has gained 67.57%, versus a -1.16% rise in the benchmark S&P 500 index during the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...

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