Canoo stock (GOEV) rally continues; Should you explore it?

Electric vehicle startup Canoo Inc. (NASDAQ: GOEV) stock jumped more than 19% in intraday trading as its rally continued for the second consecutive day on Wednesday.

The GOEV stock jumped 19.04% to US$12.44 in the premarket session at 7:13 am ET after closing at a high of more than 23% to US$10.45 a day earlier.

The stock has been rallying since it announced the third-quarter results on Monday.

The Torrance, California-based company manufactures commercial electric vehicles. 

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Why is GOEV stock rallying?

Presenting its third-quarter results on Nov 15 after the market hours, the company had revealed plans to start production in the US in the fourth quarter of 2022, preponing it from 2023. Canoo’s workforce grew 22% QoQ to 800 at the end of the September quarter of 2021. 

During the earnings announcement, it had also revealed plans to move its corporate headquarters and the advanced industrialization facility to Bentonville, Arkansas. It is part of a plan to ramp up its R&D, customer support, finance, and software development projects. 

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Source – Pixabay

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Third-Quarter Results

Canoo earned no revenue in the third quarter. Its GAAP net loss was US$(80.9) million in the quarter compared to a GAAP net loss of US$23.4 million a year ago.

Its adjusted EBITDA was US$(85.8) million, and cash and cash equivalents were US$414.9 million at the end of the September quarter of 2021.

The operating expenses were US$107 million against US$29.7 million in the third quarter of 2020. Canoo expects the operating costs, excluding stock options and depreciation, to be in the range of US$95 million to US$115 million in Q4, 2021.

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The Canoo stock has been catching attention after the series of announcements.

Canoo Inc. went public in March 2019 through a SPAC merger. The stock fell around 24.28% year-to-date but rose 30.30% month-to-date. Its market cap is US$2.48 billion. The stock traded in the range of US$24.90 to US$5.75 in the last 52 weeks.

Peer Performance

Stocks of other companies in the segment also did better this month. For instance, Fisker Inc. stock jumped 47.539%, and the Lordstown Motors Corp stock increased 6.190% MTD.

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Bottomline

The infrastructure legislation, recently signed by President Biden, is expected to give a major boost to the sector. The law has provisions for US$7.5 billion for building the EV charging infrastructure in the country.