Canoo Inc (NASDAQ:GOEV), a California-based electric vehicle startup, is a “unique commercial and military EV play,” according to analysts at Wedbush initiating coverage of the company on Friday.
The company issued an Outperform rating and a price target of $4, nearly 20x the company’s midday trading price of $0.20.
A big part of Canoo's appeal is its position in the last-mile delivery market, the firm noted. The company is partnered with Walmart and has an order book of more than $3 billion along with over $750 million in committed orders, which essentially sells its production until fiscal 2025.
“Canoo is poised for a golden opportunity on the last-mile delivery landscape while the electric battery market continues to heat up,” the analysts wrote. “Demand for lower mileage travel and greener delivery vehicles with average route length decreasing by 34% since 2000 continue to be a theme across the industry.”
The company’s first vehicle is the LDV (Lifestyle Delivery Vehicle), which is expected to be produced in two sizes. One is known as the Multi-Purpose Delivery Vehicle, and the other is the Pickup Truck.
Looking ahead, Canoo is moving toward a production run rate of 20,000 units by the first quarter of 2024 at its Oklahoma City and Pryor, Oklahoma facilities.
“We believe the current climate is favorable for Canoo at this point as we are in the early innings of this $5 trillion market EV opportunity over the next decade with the auto industry is going through one of the biggest transformations not seen since the 1950s,” analysts wrote.
“Although in the infancy stages of its growth story, we believe it is important to keep an eye on this EV manufacturer chipping away at market share as this growth story unfolds.”