Tired Of Tesla? Meet The Electric Car Stock For Modern Times, Priced For The World We Live In

Published: Mon, 07/06/20

 

Tired Of Tesla? Meet The Electric Car Stock For Modern Times, Priced For The World We Live In
(And Rallying With The 1%)

Rally On, Traders!

We review a LOT of charts around here but I think you'll agree, Arcimoto Inc. (NASDAQ:FUV) has the kind of dynamism that makes a trader stand up straight and salute:



Where did that 26% leap come from? I can't find any sudden news or shock headline, but maybe you'll find something today on the feed. Always check the headlines before you put a new stock on your radar. With companies like FUV, the news can flow so fast and furious that it will make your head spin.

After all, FUV is the kind of stock that can jump two digits out of nowhere, simply when the buzz reaches a certain level. (Check here too to get the latest chatter. What's with that 34% uptick in message volume? Something's in the air.)

This stock has jumped at least 10% ten times so far this year. That's how you take the supercharged journey from $1.61 to $5.53 in the course of six short months . . . despite the deepest market crash in recent memory doing its best to get in the way.

Remember, it takes the S&P 500 a full year to clear 10-11%, counting dividends. FUV has moved at least that far about 8% of the time. Is it any wonder it's shaping up as one of the top 1% stocks on Wall Street this year when you strip out the micro-micro-micro caps?

Yes! Out of 4645 stocks in its class, FUV's 243% YTD ranks it in the top 40 tickers on Wall Street. If you want to watch a classic firecracker rally in progress, THIS IS THE PLACE.

But what does FUV do to justify that kind of exuberance? Simple. They've invented a new kind of all-electric, no-fossil-fuel vehicle for special purposes. They call it the Deliverator. Think of it as a two-seater golf cart that can act as a taxi, delivery system (pizzas, grocery, Amazon packages, you name it).

It's pretty cool. 100 mile range between charges, 75 mph top speed, carries up to 350 pounds and can fit 20 cubic feet of "cargo" on its 3-wheel chassis. Check out the way it slides into a tiny parking space! (VIDEO)

You see the charm in a world when the outbreak has pushed home delivery volumes to the limit . . . UPS and FedEx now charge extra to keep up with the flow, while restaurant delivery has gone ballistic.

All these vendors need wheels on the ground to push their products into homes. That's where the FUV Deliverator fleet comes in handy. Of course if you just want one to drive around yourself, nothing's stopping you. FUV will rent you one, Zipcar style. Try it out. Management calls it "generating a positive cash flow from customer test drive activities."

That business just started June 22 so we don't know yet how well it's doing. But FUV picked a good town by launching its trial rental program in Los Angeles . . . land of bumper-to-bumper traffic, environmentally conscious choices and now a big upswing in viral infections. Quarantined people stay home and order delivery. People who don't want to get sick stay home too.

Want to order a whole fleet of these sleek little vehicles? FUV is happy to talk. Rentals start at $75 and you can buy one for under $20,000. Remember, all electric. No gas or diesel EVER.

It's the third design FUV has put on the road. There are also recreational vehicles and an emergency design for rescue, paramedic, you name it.

Sales have started to come in, mostly from word of mouth. Let's face it, FUV hasn't spent a lot on advertising yet and most people have been too distracted lately to even think about their transportation needs. But those who need wheels are considering their options. The story is getting out there.

Early stages, but FUV booked $616,000 in revenue last quarter . . . during the pandemic's worst ravages. That's about one new sale every three days. It would be more if the production line hadn't halted on March 20 to respect the quarantines.

The cars are still on the road saving lives and delivering supplies. And the waiting list has grown to "thousands" of preorders eager for production to start again. These are just the recreational models, the "fun" utility vehicles that put the "F" in the company's ticker symbol.

A major grocery chain is already trying the Deliverator out on the road. (VIDEO) That's how commercial traction happens: one trial deployment at a time until people start looking at you as the default option. There are nearly 40,000 groceries in America. What if every one bought just one delivery vehicle? What if this is the new status quo?

Hard to say. What I know is that it isn't cheap to ramp up a new electric vehicle (just ask Elon Musk) but FUV management has done interesting things with financing. First, you need $5,000 to get a spot on the waiting list. That money then goes to help build out manufacturing capacity. Virtuous circle!

Second, the company is applying for AND GETTING payroll stimulus loans. The terms on those are extremely favorable. FUV got enough money to retire all convertible and senior debt. The founder helped out, happily converting debt to stock at $4.25 per share.

Is the company profitable at this stage? Not yet. But neither is mighty Tesla, the luxury electric car company that's grown to $1,000 per share. The chart reminds me a little of FUV and vice versa . . . something about that ramp to glory. Let's compare:




Admittedly, FUV isn't a $180 BILLION giant. Even after a firecracker day, even after soaring nearly 300% YTD, it's barely a $100 million stock, 0.05% the size of Elon Musk's brainchild.

But do the math. In 2007, Tesla booked a tentative $100,000 in revenue. FUV is already past that stage. The next benchmark for Musk was $14 million in 2008 . . . a stunning sales ramp off that initially small base. Then by 2010, sales were already tracking above $115 million and never looked back.

If FUV can tap even a fraction of that early-stage growth, its trajectory might remind more than a few people of how Tesla conquered Wall Street if not the world. Tesla was a $2.8 billion company by the end of 2010. That's 24X sales.

FUV isn't there yet but the next year will be critical. Remember those thousands of orders waiting for the production line to start again. Once the capacity is available and the virus gives them a green light, there's nothing stopping the number of Arcimoto vehicles on the road from zooming by about 50-fold . . . just to clear the existing waiting list.

And that zoom looks a lot like Tesla in the glory pre-IPO days, doesn't it? I'm not saying history will repeat because it almost never does. But even something reminiscent of that $100,000 to $115 million trajectory (1000% growth in three years) points in the right direction. Those who can read the wind know the story.

After all, FUV is a lot easier to get into now than mature Tesla today, where it takes over $1,000 just for a taste. We're a decade out from Elon Musk's massive IPO now. Little FUV has only been on the market three years . . . practically its entire career is ahead of it, waiting for shareholders to share the ride.

Happy, Happy, Happy Trading!

                                        
                                                                                                

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