Canoo electric vehicle
Source: Canoo Facebook

Canoo (GOEV) Stock Offers Long-Term Growth at a Reasonable Price

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Jun. 16 2021, Published 10:53 a.m. ET

Canoo (GOEV) stock has gained more than 42 percent over the last month. The stock has caught the attention of many investors because of its rising short interest. However, GOEV stock is still far from its Jan. 2021 peak. What's GOEV's stock forecast, and could it be Reddit’s next short squeeze candidate?

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Canoo, an EV (electric vehicle) maker, hasn’t yet commenced manufacturing or delivering its vehicles. Canoo went public through a reverse merger deal with Hennessy Capital Acquisition in Dec. 2020.

GOEV stock is going up

On Jun. 15, GOEV stock surged by 17 percent. The gains in GOEV stock seem to be linked to its rising popularity among retail traders on Reddit’s WallStreetBets forum—GOEV stock mentions have increased around 1,796 percent in the last 24 hours, according to Quiver Quantitative data. WallStreetBets investors have infamously pumped up several stocks this year, such as AMC Entertainment, BlackBerry, and Clean Energy Fuels.

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goev stock price forecast
Source: Canoo Facebook

Despite the recent surge, GOEV stock is still down 56 percent from its 52-week high. The stock dropped as part of a larger sell-off that lowered valuations on speculative bets in the EV market.

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GOEV’s short interest is rising

According to Fintel, GOEV stock’s short volume ratio was around 35 percent on Jun. 15, compared with 15 percent on Jun. 14. The huge volume of negative bets suggests that it might be a short squeeze target.

goev stock price forecast
Source: Canoo Facebook
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GOEV’s stock forecast

According to MarketBeat, the three Wall Street analysts covering GOEV stock have each rated it differently, as "buy," "hold," and "sell." Their average 12-month target price for GOEV of $12 implies a 9 percent upside. Analysts' highest target price for GOEV is $18, and their lowest is $6.

GOEV’s stock forecast on Reddit

Retail traders on Reddit's WallStreetBets group have shown strong interest in GOEV stock. One Redditor thinks GOEV stock is undervalued and has the potential to hit $50, which is roughly 5 times its current price.

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GOEV is a good stock to buy

While several meme stocks appear to be overvalued, that isn’t the case with GOEV stock. The company has an enterprise value of around $2 billion and is expected to generate revenue of $2.3 billion in 2025, which would mean a 2025 enterprise value-to-sales multiple of 0.9x. The multiple looks reasonable compared with Tesla's and NIO's multiples of 10.7x and 11.4x, respectively.

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Canoo intends to launch its first lifestyle vehicle in 2022, followed by a delivery vehicle in 2023 and a sports car in 2025. The company expects to deliver 10,000 lifestyle vehicles in 2022. In comparison, Lucid Motors is expected to start deliveries of its luxury Air sedan in 2021. Lucid's 2025 price-to-sales multiple is 2.6x.

On Jun. 15, Canoo revealed details about its air purifying technology. The company is expected to host an Investor Relations Day on Jun. 17. Such events help investors stay up to date on a company’s plans and progress. Investors anticipate favorable news from Canoo as the EV industry expands.

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