Canoo (NASDAQ:GOEV) is an LA based EV manufacturer which uses an innovative skate-board platform to build its vehicles. Canoo first caught the attention of Wallstreet during the SPAC craze of 2020, when the EV company merged with Hennessy Capital Acquisition Corp IV Class A (NASDAQ: HCAC). The reverse merger was completed in December 2020 and raised $600 Million for Canoo to expand their EV business. More recently, GOEV stock has been heavily shorted driving the share price below its $10 PIPE offering price. However, the short interest has caught the attention of Reddit looking for a short squeeze squeeze. With plenty to breakdown, this article will explain the GOEV Stock Forecast over the next 5 years.
The Hennessy Capital Merger boosted GOEV’s cash on hand
In 2020, numerous EV innovators entered the US markets via raising capital through a Special Purpose Acquisition Company (SPAC). The SPAC merger between Hennessy Capital and Canoo was finalised on the 21st of December, 2020. Both companies merged into one under the name Canoo Inc (NASDAQ:GOEV). The transaction raised $600 million in capital that has been added to Canoo’s balance sheet. The funding will assist with the development and manufacturing of Canoo’s innovative skate-board platform.
Wallstreet expects Canoo’s revenue to surpass $50 Million in 2022
The first Canoo Electric vehicle is set to launch in 2022. In addition, the companies Business to Business (B2B) delivery vehicle program is expected to launch shortly after in 2023. The skateboard architecture that Canoo has developed allows for enough interior space for the user while also maintaining an economical manufacturing process.
Wallstreet analysts are forecasting 2022 revenue to reach $52.29 Million. More bullish analysts are projecting revenues to potentially reach $75 Million in the same year. It will be crucial for Canoo to sustain this timeline as the company continues to burn through its assets while in its pre revenue phase. In Canoo’s Q2 report, the company reported a net loss of $112 Million. The loss was primarily driven by research and development expenses exceeding $57 Million.
H.C Wainwright sees 67% upside in GOEV Stock
Wallstreet analyst, Amit Dayal from H.C Wainwright initiated coverage on GOEV stock with a Buy rating and $15 price target. The analyst highlighted the companies proprietary modular platform has the potential to capture market share in the EV space. Furthermore, Dayal noted that Canoo can leverage its modular EV platform and Skateboard design to host a variety of vehicle configurations across multiple segments. Lastly, GOEV’s overall gross margins are forecasted to ramp up to 23.4% in 2030.
Canoo revenue to reach $750 Million by 2023 according to analyst
Another Wallstreet analyst with a high end valuation is R.F. Lafferty analyst Jaime Perez. The analyst recently raised the firm’s price target on GOEV stock to $19. The price target valuation from Perez is based on the analyst’s 2023 revenue estimate of $750 Million. This forecast includes 15,000 Canoo vehicles produced in 2023. The R.F Lafferty analyst’s valuation remains the street high, representing an upside of 111% from the current trading price.
The risks of the GOEV Stock Forecast
Over the past 6 months, Canoo has changed its approach towards commercialisation. In 2020, Canoo had primarily focused on their subscription model alongside engineering services to generate a large portion of its revenue. However, as highlighted by Roth Capital analyst Craig Irwin the company has made a pivot in the way it will approach commercialisation. Canoo has de-emphasized its engineering services and pushed back its proposed subscription model for the lifestyle electric vehicle according to TheFly.
These aspects made up a large portion of forecasted revenue over the next 5 years in the companies 2020 Investor Presentation. This is a factor investors must be aware of as it has changed the companies initial revenue outlook for 2025 with revenue projected to reach $2.34 Billion.
The Bottom Line – GOEV Stock Forecast 2025
Overall, the companies 5 year outlook has pivoted in the past 6 months due to major changes in the companies commercialisation strategy. Nevertheless, recent consensus on Wallstreet remains bullish despite this fact, with R.F Rafferty analysts forecasting $750 Million in revenue by 2023. Furthermore, GOEV stock has caught the attention of Reddit as GOEV has an extremely high level of short interest.
However, the volaitlity of the de-spac market may exceed some investors risk appetite. We will see over the next 6 months if the company can bounce back above its PIPE offering price prior to entering its revenue phase.
Written by Tyger Fitzpatrick
The information above is not financial advice and does not constitute as a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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