With a mission to catalyze the shift to a sustainable transportation system, Arcimoto has started delivering its FUVs (fun utility vehicles). After the company's solid third-quarter earnings and many other positive vehicle developments and delivery announcements, its stock saw a meteoric rise this year.
Is the rise sustainable? What are the other vehicles in Arcimoto’s pipeline? Is FUV stock a buy or a sell?
About Arcimoto vehicles
Arcimoto is an Oregon-based EV (electric vehicle) maker. The company's mission is to “catalyze the shift to a sustainable transportation system.” Arcimoto designs, develops, and sells three-wheeled EVs known as FUVs. The semi-enclosed vehicle has two seats and a panoramic roof, removable doors, heated seats, and grips.
The Arcimoto FUV can reach a top speed of 75 miles per hour with an estimated range of 102.5 miles. It's priced at $19,990. However, the company has maintained that it can bring down the price to $12,000 after the production ramps up enough. Arcimoto has started delivering the vehicle. The production started in September 2019.
Arcimoto is also working on the Deliverator, which is a three-wheel delivery car. The company claims that the vehicle can maneuver through traffic and is easy to park. Arcimoto plans to offer another vehicle, Rapid Responder, which it claims can improve the response times in emergency situations. The company has already started pilot programs with the Deliverator and Rapid Responder. The production is expected to start in late 2020.
On Nov. 16, the company also announced that it has started developing the Roadster. The new model will be built on the company’s three-wheel platform and offers an electric thrill ride.
What is FUV's stock price?
EV stocks have been on a fire this year with Tesla and NIO leading the charge. However, there are many other EV stocks that are making a mark. Arcimoto stock, which trades under the ticker symbol "FUV," has seen whopping gains of almost 900 percent this year. The stock rose by more than 69 percent on Friday, Nov. 20 when the company announced its first municipal fleet pilot program.
According to the press release, the “City will test Arcimoto vehicles across six city departments, continuing Mayor Buddy Dyer’s efforts to transform Orlando into one of the most environmentally-friendly, economically and socially vibrant communities in the nation.” The meteoric rise in the stock price year-to-date isn't without merit.
Investors’ confidence in the stock increased after Arcimoto’s third-quarter results. The company recorded revenues of $683,895 in the third quarter — an increase of 1,953 percent year-over-year. The significant improvement in the top line is due to the resumption of production and vehicle sales this year.
The company hasn’t reached mass production yet. It only delivered 136 vehicles in September 2020. However, investors should note that many EV stocks have risen tremendously this year despite not delivering a single vehicle yet. Arcimoto plans to reach a high rate of production within 24 months at close to 50,000 vehicles annually.
Arcimoto FUV's stock forecast
Currently, six analysts cover Arcimoto FUV stock. Among the analysts, four recommend a buy and two recommend a hold. Their median target price of $9 implies a downside of 44 percent. Analysts’ recommendations and target prices usually lag the stock price movements. Since FUV stock has surged on the municipal pilot fleet program news on Nov. 19, analysts will likely adjust their target price upwards to reflect this positive catalyst.
Is FUV stock a good buy?
FUV stock has surged considerably year-to-date. Is the stock still a good buy or are the positives mainly priced into the stock? While a lot of good news seems to be already priced into the stock, there could still be an upside for FUV from here. Recently, the company reached the stage where it has started manufacturing FUV vehicles. There are many in the pipeline and positive news around them is enough to give the stock a positive spin.
The company is also exploring ways to start mass production and facilitate deliveries. For example, Arcimoto signed an agreement with DHL to facilitate deliveries of FUVs. Additional announcements and pilot programs will be positive catalysts for the stock.