Lightning eMotors Is a Bargain With Exciting Future Prospects
Ready to charge up your electric vehicle stock holdings with a truly unique company? Lightning eMotors (NYSE:ZEV), producer of zero-emission buses, powertrains and charging products, is a small but ambitious business — but unfortunately, ZEV stock remains under-appreciated on Wall Street.
One interesting thing about Lightning eMotors is that it has a strategic partnership with Forest River, a Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) company and North America’s largest shuttle bus manufacturer.
Moreover, Lightning eMotors recently announced a strategic partnership with Rev Group (NYSE:REVG) subsidiary Collins Bus to manufacture and deploy zero-emission, all-electric Type A school buses.
Still, informed investors will want to know whether Lightning eMotors is in good fiscal health. We’ll definitely look under the hood and check the financial stats, while also uncovering another value-added partnership — but not within America’s 50 states.
A Closer Look at ZEV Stock
On April 21, shell company GigCapital3’s stockholders approved a special purpose acquisition company (SPAC) merger with Lightning eMotors.
GigCapital3 fulfilled its purpose, and ZEV stock started trading on May 7. The share price was around $8.20 at that time.
The stock went nowhere for a while, but then it suddenly shot up to a close of $11.60 on Aug. 10.
That happened because of the Berkshire Hathaway/Forest River deal. However, it’s also possible that Reddit traders helped to fuel the rally.
Whatever excitement there was in August appears to have faded afterwards. By early October, ZEV stock fell below $8.
Thus, the stock was actually below the pre-SPAC-deal-announcement price. Is this a bad sign, or a prime dip-buying opportunity?
The answer depends on whether you feel that Lightning eMotors has what it takes to compete successfully in the electric vehicle space. This depends on the company’s financials, so let’s delve into that.
Huge Revenue Growth
To start off, we can say with confidence that Lightning eMotors is well-capitalized.
Specifically, the company ended 2021’s second quarter with $201.9 million in cash and cash equivalents on its balance sheet — not too shabby.
Moving on to the top-line results, it’s fair to say that Lightning eMotors is firing on all cylinders.
During the second quarter, the company generated $5.9 million in revenues, marking an incredible 580% year-over-year increase.
However, I won’t pretend that the fiscal picture is perfect with Lightning eMotors. There’s definitely room for improvement, especially when it comes to the company’s bottom-line results.
As it turned out, Lightning eMotors posted a second-quarter net earnings loss of $46.1 million. The company also noted that its quarterly operating expenses totaled $16.8 million.
So, going forward, the investors should look for evidence that Lightning eMotors is taking measures to reduce its capital expenditures.
A Market Across the Pond
We already cited two of Lightning eMotors’ significant collaborations. Now, we can add one more — but it’s not in the U.S.
Just recently, Lightning eMotors signed a strategic partnership with clean-energy-focused engineering and consulting company Ricardo to provide commercial electric vehicles to U.K. customers.
It’s a lucrative opportunity, no doubt. According to the press release, the U.K. represents a market with over 700,000 commercial vehicles in operation today.
The agreement calls for Lightning eMotors to build fully electric powertrains at its 231,000-square-foot Colorado facility.
Those powertrains will be shipped to the U.K. Then, Ricardo will assemble and integrate the powertrains into medium-duty commercial fleet vehicles at one of its U.K.-based manufacturing facilities.
Furthermore, Ricardo will source key components for the electric vehicle assembly from U.K. manufacturers.
Apparently, Lightning eMotors CEO Tim Reeser anticipates a fast-tracked timeline with this collaboration.
“With Ricardo’s automotive expertise and facilities, we will have electric commercial vehicles assembled and running in UK fleets in 2022,” Reeser clarified.
The Bottom Line on ZEV Stock
Early shareholders of ZEV stock enjoyed lightning-fast gains, but they didn’t last long.
Today, there may be a bargain for electric vehicle stock traders. Lightning eMotors shares are down, even while the company is quickly growing its revenues.
The U.K. partnership adds even more interest to Lightning eMotors. If the company can exercise more fiscal discipline, then we could have a real long-term winner here.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
