Shares of the emerging electric vehicle (EV) manufacturer, Mullen Automotive (NASDAQ:MULN), have had a roller coaster ride in 2022. Mullen Automotive stock jumped over 118% in the last 10 trading days. Even with this gain, MULN stock is still down about 89% year-to-date. While MULN could benefit from secular industry trends, it is in a development stage, and worries around access to capital, equity dilution, and increased competition will remain a drag on this micro-cap company (market cap of $258.77M).
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Is MULN Stock a Buy Right Now?
As stated above, Mullen Automotive stock could benefit from growing EV adoption and favorable policies. Also, MULN secured exclusive sales, distribution, and branding rights for I-GO, a compact urban delivery EV for sale in select European markets (including the U.K., Spain, France, Germany, and Ireland).
The move brings revenue generation opportunities for the company and should support its stock price. MULN’s CEO, David Michery, said, “Essentially, this transaction provides the Company with revenue-generating opportunities and promotes and extends the Company’s brand into other countries, while at the same time allowing the Company to remain fully focused on its mission of manufacturing its lineup of electric vehicles in the USA.”
Further, Mullen is optimizing its manufacturing and expanding its production capabilities with the acquisition of ELMS’ manufacturing plant.
Though these moves are expected to support its growth, the company plans to continue to raise additional capital (as it is in the development stage) through equity and debt financing. The dilution from the issuance of new shares has weighed on MULN stock and will likely restrict the upside in the future.
Bottom Line
While MULN operates in the attractive EV space, it’s still in the development phase, implying that its stock could continue to stay volatile in the foreseeable future. Moreover, industry-wide supply challenges pose challenges. However, its focus on ramping up production and securing exclusive sales deals for the European markets is positive.
TipRanks’ data shows insiders have sold $195.2K MULN stock in the last three months. Meanwhile, MULN stock scores a five out of 10 on TipRanks’ Smart Scoring system, implying a Neutral outlook.
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