(SOLO) Chart” src=”https://g.foolcdn.com/image/?url=https%3A%2F%2Fmedia.ycharts.com%2Fcharts%2F5fbcb8f4cd5f945d10af55e828fb90ff.png&w=700″/>
(SOLO) data by YCharts
There wasn’t much in the way of business-specific news behind the pullback for ElectraMeccanica last month, and the stock actually received some encouraging new price targets from analysts. The double-digit sell-off in December appears to have mostly been a reaction to the incredible gains that the Canada-based electric vehicle (EV) company’s share price notched in November.
Image source: Electrameccanica Vehicles.
While it wasn’t enough to power another month of gains, ElectraMeccanica received favorable coverage from analysts in December. Colliers published a note initiating coverage on the EV stock on Dec. 16, giving it a “buy” rating and setting a one-year price target of $7.50 per share. Stifel analyst J. Bruce Chan published a note initiating coverage on the stock the same day, starting with a “buy” rating and a one-year price target of $9 per share.
ElectraMeccanica stock closed out 2020 up roughly 188%, and the gains look even more impressive in the context of the company offering a large number of new shares to fund operations and expand its EV development. While the company’s share price nearly tripled across last year’s trading, its market capitalization rose more than 500% across the stretch (reaching roughly $505 million) due to the company more than doubling its outstanding share count.
After opening six new retail locations since October, ElectraMeccanica now has 10 retail locations and plans to open more this year. The company is also looking for a location for its U.S. assembly facility and engineering center.
The market for EV stocks has been extraordinarily hot this year, and ElectraMeccanica has benefited as interest in its single-occupant vehicles has exploded. This is still a young company with a highly growth-dependent and speculative valuation, but ElectraMeccanica is also small enough that its stock could see more huge gains if marketing efforts are successful and its Solo vehicles gain traction.
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