Company: Vicinity Motor Corp(formerly Grande West Transportation )
Listings :TSXV , NASDAQ
Ticker: VMC.V & VEV
Market cap at time of publication: $181 MCAD
Stock price at time of publication: $5,19 CAD ( reverse split price 1,8 CAD)
Business: Leading supplier of electric, CNG, gas and clean-diesel buses for
both public and commercial enterprise use in the U.S and Canada
Comparable peer : Greenpower Motor , Market cap $365 MCAD
Our top pick in the electric vehicles sector Vicinity Motors corp have finally received some very encouraging analyst coverage.
On november 29th Catalyst equity research issued a report that gave Vicinity Motors a $15 CAD price target and the report can be viewed HERE.
Catalyst bases their price target on the following numbers:
2021E Revenues (mm) $53.0
2022E Revenues (mm) $138.0
2023E Revenues (mm) $510.2
2024E Revenues (mm) $860.0
Catalyst research puts a big emphasis on the large cooperations that Vicinity Motors has been clever enough to sign with retailers such as ABC companies, an exclusive reseller agreement with innoative company Optimal EV, and a collaboration agreement with the JB Poindexter business unit, EAVX, which will begin to drive revenue growth in 2022.
Catalyst come to this conclusion concerning EBITDA estimates
“EBITDA is forecast to increase to $50.0 million and $102.0 million in 2023 and 2024 respectively with the EBITDA margin increasing to the 12% level in 2024. Net income is forecast to increase to $32.0 million or $0.83 per share in 2023 and advance further in 2024 to $70.0 million or $1.82 per share”
In our own assumption based on Catalyst’s net income figures ESGFIRE calculates that by putting a 20 X multiple on Net income we could be looking at a market cap of $1400 MCAD in 2024 (up 744 % from todays level).
The second research report was issued on 2nd of December by Spartan Capital and can be viewed HERE. This report gave Vicinity Motor a price target of $25 USD or $ 32 CAD indicating a 600 % upside.
Sparta capital emphasis is on the Class 3 vehicle market for electric vehicles that Vicinity Motors have recently entered.
This qoute is from the actual report: “Its new VMC 1200 class 3 commercial cab and chassis vehicle is well suited for the commercial and municipal markets with Mitsubishi Fuso recently exiting the market. There is no other competing electric class 3 cabover vehicle on the market. Vicinity has partnered with JB Poindexter which makes a wide variety of truck bodies and has strong customer loyalty to make payload bodies for the VMC 1200”
Vicinity Motors new US factory in Washington which makes their vehicles buy america compliant is another great catalyst for Vicinity Motors according to Sparta Capital, They estimate production from this plant will begin in Q2 2022 and ramp rapidly in 2023.
Precisely like ESGFIRE has stated many times before Sparta Capital states that Vicinity Motors is trading at just 0.7 X the projected revenue (based on Sparta Capitals projections) for 2023 compared to 5,9 X for peer comparables. Sparta Capital also state that their estimates are conservative since they are below managements own guidance. Sparta Capital also thinks Vicinity Motors should be trading at a premium evaluation but is currently trading at a massive discount to comparable peers. Not only is Vicinity Motor undervalued by normal measures their products are also first in class and best value for money as can be seen in the report by Sparta Capital. Sparta Capital also highlights that Vicinity Motors should be highly favoured by the new infrastructure bill in the United states which will put 39.2 billion USD into Public transit and converting many old fossile vehicles into electric ones from suppliers that are buy america compliant just like Vicinity Motors!
Below is a picture of the peer evaluation comparables from Sparta Capital’s report:
ESGFIRE is very pleased to see that Vicinity Motors is finally getting the appreciation by analysts as is deserved. These two reports are the first but most likely not the last to come from analysts with a sharp sight for undervaled companies in the electric vehicles sector!
We own shares of these companies personally.
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