Analysts at BofA initiated ZEEKR Intelligent Technology (ZK) with a Buy rating and $35 per share price target in a note Tuesday, labeling it a "fully charged startup" that is set to shine in the electric vehicle (EV) space.
The price target for the Chinese electric vehicle company represents around a potential 37% upside from current levels.
The investment bank expects ZEEKR to post a 27% revenue CAGR in 2024 to 2026 and to turn profitable in 2026. This is driven by two main factors.
First, analysts see a 31% volume CAGR from 2024 to 2026, supported by the company's "solid product pipelines and superior customer value proposition."
Secondly, they highlight the forecasted GPM improvement from 13.3% in 2023 to 16.1% in 2026 and its improving operating leverage. This is thanks to scale effects and the company's synergy with Geely Group.
Bank of America says ZEEKR is trading at 0.7 times EV/sales (2024), behind its peers' average of 0.8 times.
Analysts also acknowledge the current risks to the company and stock, including weak macro, new model failure, competition and a deteriorating
pricing environment.