Tuesday, On Wall Street, GreenPower Motor Company Inc (NASDAQ:GP) stock retained its Buy rating and a $3.00 price target from Roth/MKM. The firm's stance is based on GreenPower's low breakeven threshold, which requires delivery of only 50-60 units per quarter to remain profitable, depending on the product mix.
The company's backlog, which includes firm orders for 100 EVSB units and an additional 160 units in the pipeline, is expected to generate over $100 million in revenue.
The analyst at Roth/MKM expressed confidence in GreenPower's improving outlook, anticipating that customer deliveries will face fewer delays in the upcoming summer. The firm is optimistic about the production ramp-up at GreenPower's new facility in West Virginia and suggests that the delivery of EVSB units could serve as a positive catalyst for the company.
The current order book for GreenPower, comprising both firm orders and units in the pipeline, is seen as a significant revenue driver. The firm's analyst highlighted the potential for these orders to positively impact GreenPower's financial performance, given the substantial revenue these orders represent.
Roth/MKM's coverage of GreenPower includes a close watch on the company's production activities, especially as they scale up operations at the West Virginia manufacturing site. The firm's recommendation to investors is to consider purchasing shares if the stock price drops, viewing any weakness as a buying opportunity in anticipation of the positive momentum from EVSB deliveries.
GreenPower's business model, which achieves breakeven with relatively low unit sales per quarter, is a key factor in Roth/MKM's positive rating. The firm's analyst has pointed out that the company's ability to maintain profitability with a minimal number of deliveries bodes well for its financial stability and growth prospects.
In other recent news, GreenPower Motor Company Inc. reported a revenue of $39.3 million and a gross profit of $5.4 million in its Year-End Earnings Call for the fiscal year ending March 2024. The company has seen an uptick in school bus sales, with orders for over 100 buses and a pipeline for over 160 buses. However, GreenPower is currently awaiting an $18.6 million EPA grant, which has delayed certain bus delivery dates.
Further developments include the company's transition to production driven by customer orders, with CEO Fraser Atkinson emphasizing the potential of the school bus market. Sales of upfitted commercial EV Star vehicles have also increased by nearly 50%.
GreenPower operates two fully functional production facilities in California and West Virginia, and targets long-term prospects in states with electric vehicle mandates and funding incentives.
The company anticipates strong growth in the electric school bus and commercial vehicle markets and plans to deliver 88 school buses in West Virginia by fiscal year 2025. Despite challenges related to charging infrastructure and delays in securing EPA-funded contracts, GreenPower maintains a positive outlook for the future.
InvestingPro Insights
As GreenPower Motor Company Inc (NASDAQ:GP) garners a positive outlook from Roth/MKM with a retained Buy rating and a $3.00 price target, real-time data and insights from InvestingPro offer additional context for investors. The company's market capitalization stands at a modest $27.29 million, reflecting its position in the market. Despite challenges, analysts foresee potential sales growth in the current year, which aligns with the optimism expressed by Roth/MKM regarding the company's order backlog and production ramp-up.
However, it's worth noting that GreenPower operates with a significant debt burden, which raises concerns about its ability to make interest payments on its debt. Moreover, the company's gross profit margin at 13.64% suggests room for improvement, and analysts do not anticipate the company will be profitable this year. On a more positive note, GreenPower's liquid assets exceed its short-term obligations, providing some financial cushioning. With the stock trading near its 52-week low and the price significantly down over the last year, investors may find the current valuation an attractive entry point, especially considering the InvestingPro Fair Value estimate of $1.22.
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