On Wednesday, Roth/MKM began coverage on XOS Inc. (NASDAQ: XOS) stock, an electric vehicle manufacturer specializing in Class 5-6 step vans. The firm issued a Buy rating on the stock, accompanied by a price target of $15.00. XOS Inc. has been recognized for its position as an early leader in the electric vehicle industry, having delivered over 700 units to date.
The company is expanding its growth initiatives to include supplying electric vehicle drivetrains to third-party original equipment manufacturers (OEMs) and offering an electric vehicle charging solution known as the charging Hub. These initiatives are expected to benefit from significant parts commonality with XOS step vans.
In their coverage initiation, Roth/MKM highlighted the potential for XOS to contribute to Blue Bird (NASDAQ:BLBD) Corporation's (NASDAQ: BLBD) growth and cost reduction strategy. The firm suggests that XOS could be a lower-cost and more versatile supplier than the current provider, Cummins-EDI (NYSE: CMI), which could drive further upside to Roth/MKM's model.
The analyst's statement emphasized the strategic moves by XOS, "We initiate coverage on XOS at Buy with a $15 target. The company is an early leader in all-electric Class 5-6 step vans, with over 700 units delivered to-date. Growth initiatives moving to supply EV drivetrains to third-party OEMs and offering the charging Hub both leverage substantial parts overlap with the Xos step vans."
Roth/MKM's coverage and positive outlook on XOS Inc. reflect the firm's expectations for the company's role in the electric vehicle industry and its potential to enhance the offerings of other manufacturers like Blue Bird. The price target of $15.00 sets a benchmark for the company's stock as it continues to navigate the growing electric vehicle market.
InvestingPro Insights
While Roth/MKM's optimistic outlook on XOS Inc. paints a promising picture, recent InvestingPro data provides additional context for investors. Despite the company's strong position in the electric vehicle industry, XOS faces some financial challenges. The company's market capitalization stands at $36.66 million, reflecting its current market valuation.
InvestingPro Tips highlight that XOS is experiencing rapid sales growth, with revenue increasing by 119.67% over the last twelve months. This aligns with the company's expansion initiatives mentioned in the article. However, it's important to note that XOS is currently not profitable, with a negative operating income of $46.06 million in the same period.
Two key InvestingPro Tips are particularly relevant:
1. XOS is quickly burning through cash, which could impact its ability to fund growth initiatives.
2. The company's stock price movements are quite volatile, which investors should consider when evaluating Roth/MKM's $15 price target.
These insights, along with 13 additional tips available on InvestingPro, provide a more comprehensive view of XOS's financial position and market performance. Investors interested in a deeper analysis may find value in exploring the full range of tips and metrics offered by InvestingPro.
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