On Monday, Roth/MKM adjusted its price target for GreenPower Motor Company Inc (NASDAQ:GP), dropping it to $3 from the previous $7 while retaining a Buy rating on the stock. The firm noted that GreenPower has experienced improved growth visibility, attributed to an increase in orders and deliveries of electric vehicle (EV) school buses.
This uptick follows a significant financing event by a major customer, which had previously paused deliveries in the second fiscal quarter of 2024.
GreenPower Motor has successfully delivered over 900 commercial EVs to date. The company currently boasts 102 orders and 164 qualified leads for its BEAST and Nano BEAST EV school buses. These figures suggest a growing market interest in the company's offerings.
The company's financial health was also highlighted, with a particular focus on its gross margin profile and controlled expenditure. According to the firm, this financial discipline positions GreenPower to reach EBITDA breakeven once it surpasses $20 million in quarterly revenue. This milestone is projected to be achieved within the next year.
The analyst's remarks underscore GreenPower's strategic position in the EV market, especially in the school bus segment. The company's ability to secure a large number of orders and leads indicates a robust demand for its products. Moreover, the completion of a major financing by a key customer is a positive sign that previous delivery delays may be resolved, potentially smoothing the path for future revenue growth.
In summary, GreenPower Motor's current operational strategy, marked by an increase in EV school bus orders and a significant financing event, has led to a revised price target. Despite the reduction in the price target, the company's outlook remains positive with expectations of reaching EBITDA breakeven in the foreseeable future.
InvestingPro Insights
As GreenPower Motor Company Inc (NASDAQ:GP) navigates the dynamic electric vehicle market, real-time data from InvestingPro provides a deeper dive into the company's financials and stock performance. With a market capitalization of $49.83 million and a P/E ratio that reflects its current non-profitable status at -3.20, investors can gauge the company's valuation in relation to its earnings. The significant revenue growth of 72.38% over the last twelve months as of Q3 2024 indicates a strong upward trajectory, despite a quarterly dip of -36.28% in the same period. This growth, alongside a gross profit margin of 15.61%, suggests that while the company is expanding its revenue base, profitability remains a challenge in the near term.
InvestingPro Tips highlight the stock's volatility and its trading near a 52-week low, which may catch the attention of value investors seeking potential entry points. Additionally, the fact that GreenPower's liquid assets exceed short-term obligations provides some reassurance regarding the company's ability to meet its immediate financial commitments. Notably, analysts do not anticipate the company will be profitable this year, aligning with the company's reported negative operating income margin of -28.25%. However, the company's strategic focus on the EV school bus market aligns with the increased orders and leads, suggesting potential for future growth.
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