Stock Analysis & Ideas

Mullen Automotive Stock (NASDAQ:MULN): An EV Gamble Worth Taking

Story Highlights

Mullen Automotive is one of many electric vehicle makers, but the company differentiates itself with sleek, powerful cars. There’s certainly no guarantee that Mullen stock will get into the fast lane, but a spate of encouraging news developments suggest multi-bagger potential.

Mullen Automotive (NASDAQ: MULN) is an ambitious startup in a market that’s growing and receiving government support. It’s also a competitive field, though, and Mullen has to prove its viability as a business venture. Nevertheless, I am bullish on Mullen Automotive stock as the company has a relentless drive to expand its market footprint in the U.S. and internationally.

Mullen Automotive is an electric vehicle (EV) manufacturer that’s based in California. Some EV makers focus on producing good-looking vehicles, while others strive to build powerful ones; Mullen manages to achieve both at the same time.

As we’ll discover, Mullen Automotive stock is for traders who are on board with the company’s ambitious vision and don’t mind the risks involved. For audacious EV-market investors, then, Mullen has the makings of a possible 2x, 5x, or even 10x return on investment – but let’s downshift our gears for a moment and first consider the obstacles along the path to potential gains.

Mullen Automotive is Unprofitable and Has Debt

If you’re looking for a “steady Eddie” type of investment, Mullen stock isn’t it. Mullen Automotive isn’t a profitable business, and the company has a fair amount of debt. On the other hand, Mullen does appear to be taking action to pay down its debt.

It’s not entirely unusual for an EV startup to be unprofitable for a while. However, Mullen Automotive might alarm some cautious investors as the company has trailing-12-month earnings per share (EPS) totaling -$4.96. That’s not an encouraging statistic when the stock price is below $0.30.

Some folks also might find it off-putting that Mullen Automotive stock was a $5 stock at the beginning of 2022 but is now under $0.30. If your credo is “The trend is your friend,” then frankly, MULN stock probably isn’t right for you.

Finally, you need to consider Mullen Automotive’s debt. There’s actually good news on this front, though, as Mullen has managed to reduce its estimated debt burden from over $30 million last year to less than $10 million currently. Just maybe, Mullen Automotive can become debt-free someday, and this could make the company more financially viable.

Mullen Automotive is Pushing Aggressively into Multiple Markets

If you’re basing your trades on what a company has achieved financially, then you might not be particularly impressed with Mullen Automotive. The future could look a whole lot brighter than the past, though, as Mullen is proactive in making its presence known domestically and abroad.

For example, Mullen embarked on its “Strikingly Different” tour in late October, with the itinerary spanning notable destinations such as Los Angeles, Las Vegas, Dallas, Miami, Houston, and Atlanta. Chairman and CEO David Michery observed early interest in Mullen’s FIVE EV Crossover vehicle model, saying it was “very gratifying to see the FIVE reservations pour in and the tour slots fill up in a matter of minutes.”

Just a few days into the tour, Mullen reported positive feedback about the company’s vehicle offerings. Participants at Pasadena, California’s “Strikingly Different” tour stop were apparently impressed with the Mullen FIVE’s infotainment system, which featured PERSONA, Mullen’s proprietary Personal Vehicle Assistant technology. The press release touted PERSONA’s facial recognition technology, which is “designed to provide every driver with a highly personalized experience in the Mullen FIVE.”

By the way, Mullen Automotive isn’t confining its marketing outreach to U.S. borders. In fact, the company recently announced that its compact urban delivery electric vehicle, the I-GO, is certified and ready for sale in Germany, Spain, France, the UK, and Ireland. If all goes according to plan, the first I-GO models will be delivered in Germany in December of this year.

Now, you might be thinking that inflation is even worse in Europe than it is in the U.S. right now. That’s a valid concern, but Mullen Automotive assured that the I-GO “will have a starting price of $11,999 plus VAT and local transportation.” So, it shouldn’t be unaffordable even during this time of elevated consumer prices in the EU.

Conclusion: Should You Consider Mullen Automotive Stock?

What’s more important, past performance or future possibilities? As a prospective investor, you’ll need to do some self-reflection and consider whether you’re willing to ignore Mullen Automotive’s current lack of profitability and envision a successful foray into America, Europe, and wherever else EVs may be sold someday.

In the final analysis, MULN stock represents a speculative bet in a tough market. Clearly, Mullen Automotive is of the “get rich or die trying” mentality, and if you’re bold enough to get on board – with the caveat that all position sizes should be very small – you just might have a massive EV-market winner on your hands.

Disclosure

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