Arcimoto, Inc. (FUV) designs, develops, manufactures, and sells three-wheeled electric vehicles (EVs). Its product portfolio primarily includes Arcimoto’s FUV (Fun Utility Vehicle) that has two seats. The company is also working on Deliverator, a three-wheel delivery car. It also plans to offer the Rapid Responder for first responders. Both models are similar to the FUV. Every FUV vehicle is built at the Arcimoto Manufacturing Plant in Eugene, Oregon.

FUV is producing ultra-efficient and affordable EVs to help the world shift to a sustainable energy-based transportation system. It is one of the best-performing stocks in 2020, with record revenue growth. In the third quarter ended in September 2020, the company generated $683,895 in revenues, increasing 1,953% year-over-year. The increased revenue in the current year period was due to the resumption of vehicle production and customer deliveries. The company reported a loss of $0.15 per share, significantly improving from the year-ago loss of $0.22 per share.

With the robust growth in the EV market, the stock gained 419.3% year-to-date. This impressive performance and the potential upside based on several factors have helped FUV earn a “Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates FUV:

Trade Grade: B

FUV is currently trading higher than its 50-day and 200-day moving averages of $6.28 and $4.18, respectively, indicating that the stock is in an uptrend. The stock’s 26.1% return over the past month reflects an intriguing short-term bullishness.

FUV has recently begun the development of its newest product, the Roadster, a pure electric thrill ride, in collaboration with Corbin-Pacific and National Cycle, to compete in the recreational motorcycle segment. The company has also partnered with DHL Global Forwarding to deliver Arcimoto FUVs from the factory floor to customer homes across the country.

Buy & Hold Grade: A

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade takes into account, FUV is well-positioned. The stock is currently trading just 6% below its 52-week high of $8.89.

Looking at the past three years, the stock has grown more than 102.4% due to its effective research and development expenditure and improving end-to-end manufacturing and assembly processes. FUV’s top-line has increased at a CAGR of 258% over the same period.

FUV initiated production in September 2019 and has produced 136 vehicles in total, till the end of the third quarter. The company is presently delivering vehicles to its early customers. Total 31 vehicles were delivered in September alone. Pilot programs are underway with the Deliverator and the Rapid Responder, with the production of these vehicles set to begin in late 2020. However, the company is already taking pre-orders for the Deliverator.

Peer Grade: C

FUV is currently rated #24 out of 33 stocks in the Auto & Vehicle Manufacturers industry. Other popular stocks in the group are Tesla, Inc. (TSLA), Nikola Corp. (NKLA), and Workhorse Group, Inc. (WKHS). While WKHS has gained 555.3% year-to-date, TSLA and NKLA have returned 387.8% and 112.2%, respectively, over the same period.

Industry Rank: A

The StockNews.com Auto & Vehicle Manufacturers industry is ranked #22 out of the 123 industries. The companies in this industry manufacture and sell vehicles such as passenger cars, light trucks, motorcycles, and more. Demand is driven by employment and interest rates. Underutilization of production plants due to lockdowns and lower auto loan generations have severely impacted the industry. However, there has been growing excitement among investors about the automotive industry going electric.

Overall POWR Rating: B (Buy)

Overall, FUV is rated a “Buy” due to its impressive quarterly performance, short-and-long-term developments, and solid price momentum, as determined by the four components of our overall POWR Rating.

Bottom Line

The stock has soared so far this year and may grow further based on its continued business growth, favorable earnings, and revenue outlook. The company is consistently reporting a quarter-over-quarter net increase in pre-orders that it looks to fulfill as quickly as possible. FUV is growing fast and the company is focusing on scaling to mass production.

Analyst sentiment, which gives a good sense of a stock’s future price movement, is favorable for FUV. An average broker rating of 1.33 indicates a favorable analyst sentiment. Of the 6 analysts that rated the stock, 4 have given it a “Strong Buy” rating. Analysts expect current quarter revenues to grow 134.1% year-over-year. The consensus EPS estimate for the ongoing quarter indicates a 45% rise from the year-ago value. This outlook should keep FUV’s price momentum alive in the near term.

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FUV shares were trading at $7.89 per share on Tuesday afternoon, down $0.47 (-5.62%). Year-to-date, FUV has gained 390.06%, versus a 13.71% rise in the benchmark S&P 500 index during the same period.

About the Author: Sidharath Gupta

Sidharath’s passion for the markets and his love of words guided him to becoming a financial journalist. He began his career as an Equity Analyst, researching stocks and preparing in-depth research reports. Sidharath is currently pursuing the CFA program to deepen his knowledge of financial anlaysis and investment strategies. More...

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