Canoo Has 'A Multi-Billion Revenue Opportunity,' Says Bullish Analyst

Zinger Key Points
  • Canoo targets a niche commercial fleet segment with limited competition and large potential.
  • The company boasts a $3 billion sales pipeline, including major contracts like Walmart.

Canoo Inc GOEV operates in a segment where even the likes of Tesla Inc TSLA are reporting weak delivery numbers.

The company has repositioned itself and the market appears to have "lost sight of the magnitude of the opportunity," according to Benchmark.

The Canoo Analyst: Michael Legg initiated coverage of Canoo with a Buy rating and a price target of $5.

The Canoo Thesis: The company faces limited competition in the Class 1 and Class 2 commercial fleet segment, as larger OEMs (original equipment manufacturers) are more focused on the consumer segment, Legg said in the initiation note.

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Canoo has built a sales pipeline of $3 billion to date, which includes $750 million in contracted orders with clients like Walmart Inc WMT, the United States Postal Service and the US military, he added.

"According to Global Market Insights, the light duty truck market exceeds $15 trillion globally that should provide expanding market opportunities as the long-term benefits of EV's, combined with government incentives, fuel adoption," the analyst wrote.

"A low single-digit share of the forecasted EV light commercial market suggests a multi-billion revenue opportunity for GOEV by 2030," Legg added.

GOEV Price Action: Shares of Canoo were up 3.4% to $3.03 at the time of publication on Wednesday.

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Photo: Canoo

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