Contributor, Benzinga
October 12, 2021

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When investors think of the electric vehicle (EV) industry, the focus spotlights sports cars, sedans and SUVs. Let’s face it, you can’t miss a Tesla. Manufacturing EVs for individual use is a crowded field, but another type of vehicle seems underdeveloped in the EV space. 

Trucks, buses and other large vehicles used for transporting people and materials are important cogs in the world’s transportation infrastructure. Lion Electric (NASDAQ: LEV) is a Canadian EV manufacturer offering urban class trucks, transit buses and school buses. The company also offers parts, service and charging infrastructure products. Originally founded in 2011, Lion Electric has had no shortage of funding and recently went public under the ticker symbol LEV.  

Lion Electric has products that fulfill a unique niche in the automobile industry, but investing in upstart companies that just entered the public sphere always carries an element of risk.

LEV Stock Price

Lion Electric went public in late 2020 during the special purpose acquisition company (SPAC) craze, merging with a public firm called Northern Genesis Acquisition Corp (NYSE: NGAB). Christened LEV, shares are currently listed on both the Nasdaq and Toronto Stock Exchange.

As with most startups in the EV space, volatility is par for the course. Like all SPAC-influenced equities, the stock began trading at $10 per share in October 2020. The early trading sessions for LEV were quiet, but the stock began to rev up just as the meme stock craze began. As GameStop (NASDAQ: GME) was ripping to unprecedented highs, so was LEV — the stock more than tripled from its initial public offering price (IPO) price by mid-January 2021. 

Unfortunately, it’s mostly been downhill for the stock since then. Despite a brief summer surge in early June, LEV shares have traded down from its $35 all-time high. Today, the stock is hovering right around its IPO price, an impressive round trip in only a year of trading.

LEV Stock Forecast

Lion Electric fulfills a niche that many other EV producers choose not to concentrate on, but having a niche market means depending on a smaller number of viable customers. Individuals and families won’t have much use for the buses and large trucks offered by Lion Electric.

In order to become successful in the public market, LEV will need to develop a reliable customer base that’s likely to include partnerships with governments, institutions and businesses. Thankfully, competition in this area of the EV market isn’t particularly stiff, and Lion Electric already has several models to offer.

However, where the stock goes from here is anyone’s guess. Analysts seem to be bullish on the shares, but regulatory tailwinds are likely needed for the stock to reach its previous highs.

LEV Stock News

Some recent news items on Lion Electric:

  • In September, Barclay’s became an early firm to offer coverage on the stock, initiating the shares with an overweight rating and a price target of $17, representing 70% upside from the current price. Barclay’s (NYSE: BCS) cites the company’s first-mover advantage as a reason for the optimistic outlook.
  • The company’s most recent quarterly earnings report saw revenue nearly triple on a year-over-year basis. Lion Electric delivered 61 trucks and buses in Q2 and has current orders for over 900 additional vehicles. Operating losses deepened, however.

Want to stay up to date on all LEV breaking news and analysis? Add the stock to your Benzinga watchlist now.

How to Buy Lion Electric Co. Stock

Looking to add LEV shares to your stock portfolio? Here’s how to get started.

Step 1: Choose a Broker with LEV Shares Available.

LEV is a Canadian-based company, but it trades on exchanges in both the United States and Canada, so you shouldn’t have trouble locating them. As such, the tools and platform offered by potential brokers should carry more weight in your decision. Pick a broker that makes sense for you, but double check and make sure LEV shares are available before signing up.

Step 2: Decide How Many Shares You Wish to Buy.

Buying individual stocks is always risky. Factor in a new sector like EVs and the fact the shares have been trading for only a year — that’s a recipe for volatility. If you’ve decided to buy LEV shares, you likely can stomach a little volatility, but don’t put too much of your capital into a single new issue like LEV.

Step 3: Choose Your Order Type.

Once you’ve decided how much of your capital to put into LEV shares, you’ll need to construct your buy order. Impulsively entering a market order could give you a poor entry price, so use a limit order instead and decide exactly where you want your entry to be. Limit orders allow for more precision and reduce slippage.

Step 4: Execute Your Trade

Executing your trade means finding an ideal entry point for your order. Here’s where technical indicators like moving averages and support and resistance levels can aid in your approach. Look for a traditional support level and set your limit order to buy at that price. Maximizing profits is crucial in trading, so don’t rush in just because you like the stock. Once your trade is executed, use Benzinga’s tools to monitor your investment.

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LEV on Benzing Pro

img_6165b838cc2b0

Screenshot taken from Benzinga Pro on 10/11/2021

From a technical standpoint, it’s tough to find something to like about LEV shares at the moment. Since reaching its all-time highs in January, the stock has been on a steady downward trajectory. A long-term support level around the $14 mark was breached in August, and the stock now trades around its IPO price at $10.80.

In the chart above, LEV shares trade below both the 50-day and 100-day moving averages. The current trend is still bearish, and it will likely take some kind of catalyst for the stock to break out of this downward momentum.

LEV Serves a Unique Niche, but Uncertainty Abounds

Lion Electric fulfills a need that few other EV manufacturers attempt to fill. The path to lower pollution certainly involves large EVs like buses and trucks that can be used in public transit, shipping and a variety of other industrial uses.

Analysts are bullish on the stock and unlike some competitors, Lion Electric has models in production and available for purchase — right Nikola (NASDAQ: NKLA)? Revenue is increasing and orders continue to roll in for Lion Electric, but the company still has a long way to go before turning a profit. Uncertainty will probably follow LEV shares around for a while longer.

Frequently Asked Questions

Questions & Answers

Q
Is Lion Electric profitable?
A

The company reported negative earnings per share in its most recent earnings report. Despite increasing revenue and vehicle orders, the company did not turn a profit in Q2.

Q
Is Lion Electric an American company?
A

No, Lion Electric is headquartered in Quebec; however, it does have an office in Sacramento, California. LEV shares trade on both the Toronto Stock Exchange and the Nasdaq exchange.