Shares of the EV (electric vehicle) startup Canoo (NASDAQ:GOEV) closed over 49% higher on Monday, March 18. Further, it is up about 10.7% in the pre-market session on March 19. The notable jump in GOEV stock came after the U.S. Department of Commerce approved its Oklahoma City facility as a Foreign Trade Zone, which will result in significant cost savings. Adding to the positives, analysts love this penny stock (learn more about penny stocks here) and are bullish about its prospects.
Before we dig deeper, it’s important to note that the FTZ will enable the company to lower its vehicle costs and significantly enhance profitability. The company expects that the approval of the facility will result in a total cost savings of $70 million in 2024 and 2025. Further, it will accelerate Canoo’s path to breakeven.
Is GOEV Stock a Good Buy?
Despite the recent gain, GOEV stock is down about 51% year-to-date and more than 80% in one year. Macro uncertainty and continued cash burn weighed on investors’ sentiment. Nonetheless, Wall Street analysts maintain an optimistic outlook on GOEV stock.
On March 15, Alliance Global Partners analyst Poe Fratt lowered his price target on GOEV stock to $18.50 from $20 due to the company’s reverse stock split and an anticipated increase in share count. However, Fratt maintained a Buy rating on Canoo stock, citing potential benefits from its unique modular design, robust order backlog, expanding production capacity, and improved funding prospects.
Notably, Canoo is in the revenue generation phase. The company’s growing sales pipeline, expected cost savings from the FTZ, and solid backlog augur well for growth. The stock sports a Strong Buy consensus rating based on three unanimous Buy recommendations.
Bottom Line
Canoo is poised to benefit from its focus on ramping production, a commercial customer base, and cost-saving measures. This is reflected in the analysts’ Strong Buy consensus rating. Besides for GOEV, investors can use TipRanks’ penny stock screener to find more compelling penny stocks.
