What happened
Shares of ElectraMeccanica Vehicles ((NASDAQ: (SOLO))) fell 17.1% in December, according to data from YCharts. The decline followed a 168.7% increase for the company’s share price in November.
(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.
So what
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.
Now what
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.
10 stocks we like better than Electrameccanica Vehicles Corp.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Fintech Zoom Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Electrameccanica Vehicles Corp. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of November 20, 2020
Keith Noonan has no position in any of the stocks mentioned. The Fintech Zoom has no position in any of the stocks mentioned. The Fintech Zoom has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.