Shares of GreenPower Motor (GPV), a Canadian builder of electric buses, reported a higher adjusted EBITDA loss in the second quarter despite a strong increase in revenues.
Q2 Financial Results
Revenues on the delivery of 44 vehicles came in at C$4.44 million for Q2 2022, an increase of 57% over revenues of C$2.84 million on the delivery of 15 vehicles for Q2 2021. Cost of revenues was C$3.49 million, for a gross profit of C$0.95 million or 21.5% of revenues compared to a gross profit of 30.1% for the previous year.
GreenPower posted an adjusted EBITDA loss of C$1.37 million in the second quarter compared to an adjusted EBITDA loss of C$1.12 million in the prior-year quarter.
Working capital was C$31.33 million at the end of the quarter ended September 30, compared to C$30.81 million at the end of the previous quarter.
CEO Commentary
GreenPower CEO Fraser Atkinson said, “As we expected, vehicle deliveries accelerated near the end of our fiscal second quarter and that trend has continued into the current period. Presently, we have over 100 approved vouchers for eligible vehicles listed on the California HVIP, New Jersey ZIP and B.C. SUVI rebate program, which will continue to support increased deliveries in coming quarters.
“Sales pipeline activity continues to grow with a variety of large volume opportunities across the GreenPower product line. We have significantly expanded our sales infrastructure and network and we expect to see the benefits of that investment materialize over the next several quarters.”
On August 31, GreenPower launched the all-electric BEAST Type D school bus. With an industry-leading capacity of 90 seats and features, this bus is expected to have a significant impact on revenues in the second half of this fiscal year.
Inventories stood at C$22.8 million as of September 30, 2021, up from C$5.7 million a year ago. (See Insiders’ Hot Stocks on TipRanks)
Wall Street’s Take
On October 25, B. Riley analyst Christopher Souther kept a Buy rating on GPV and lowered its price target to $24 (C$30.22). This implies 63.6% upside potential.
Souther stated that GreenPower’s delivery schedule “continues to be lumpy” and appears to be lighter than expected. The analyst said the recent company’s announcements “have underwhelmed.” He awaits significant deliveries from the company.
Overall, GPV scores a Strong Buy rating among Wall Street analysts based on four Buys. The average GreenPower Motor price target of C$38.08 implies 106.2% upside potential to current levels.
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