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. Since listing, GOEV stock has struggled to maintain its 2020 momentum, currently trading below its PIPE offering price. In this article we will dive into the GOEV Stock Forecast and discuss the outlook for Canoo moving into 2022 and beyond.
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 roughly $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.
Canoo Lifestyle Vehicle production expected in Q4 2022
In the third quarter, Canoo announced that its advanced manufacturing production in the U.S. will begin before Q4 2022, accelerating its schedule. This means Canoo will begin manufacturing its Lifestyle Vehicle at its Oklahoma factory before the fourth quarter of 2022.
However, the companies partnership with VDL looks to cease after a recent SEC filing. Earlier this year, Canoo picked Netherlands-based VDL Nedcar as a key manufacturer for the Lifestyle Vehicle in Europe.
The manufacturer was expected to produce 1,000 units in 2022 and 15,000 units by 2023. If the companies contract with VDL falls out, Canoo’s entry into the European market will be put on hold. Nevertheless, US production of the LifeStyle Vehicle will open up the North American EV market to Canoo in 2023.
“We have been working closely with Tony and the entire team at Canoo in the months since they made their announcement to locate their initial U.S. manufacturing facility at the Mid-America Industrial Park in Pryor, OK,”said Scott Mueller, Oklahoma’s Secretary of Commerce and Workforce Development.
H.C Wainwright sees 67% upside in GOEV Stock
Earlier this year 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. It is worth noting that a fallout in the VDL manufacturing contract may impact this forecast, as delivery delays will likely impact revenues. The R.F Lafferty analyst’s valuation remains the street high, representing an upside of 50% 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.
With changes in the companies delivery timeline, investors should note this will directly impact these forecasts.
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 somewhat 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 if the companies contract with VDL falls out, and if so how Canoo management will strategise the Lifestyle Vehicle roll out. If the companies onshore manufacturing plans remain on track, we may see deliveries begin at the end of 2022 or early 2023.
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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