Roth Capital Partners has set a price target of US$7.50 on electric vehicle manufacturer ElectraMeccanica Vehicles Corp (NASDAQ:SOLO) after the company’s recent financials came in ahead of analyst estimates.
The research firm noted that initiating production at Vancouver-based Meccanica’s Zongshen, China manufacturing facility would be a key catalyst for the company going forward.
“We do not view quarterly financial results as particularly meaningful at this pre-ramp stage and would view initiation of volume production at Zongshen as a more significant catalyst,” analyst Craig Irwin wrote in a note Friday.
Nevertheless, Meccanica’s 2Q financials were ahead of Roth’s estimates for the period ended June 30, 2019. The company reported 2Q revenue of C$200,000 in line with Roth’s forecast, while an adjusted loss of $0.11 per share was slightly better than the $0.13 estimate.
Highlights of the three-month period ending June 30, 2019 included conducting internal quality assurance and safety tests on the first 47 pre-production SOLO, testing items such as calibration, stability, and brake systems.
In a statement accompanying its financials on Thursday, Meccanica said it made “considerable progress” as it transitions to full-scale production, establishing critical sales and service infrastructure, securing key consumer rebates on the West Coast to further lower the cost of the SOLO and strengthening its intellectual property portfolio.
Other catalysts that Roth expects to drive the share price include updates to pre-order numbers, potential distribution partnerships and the opening of additional retail dealership locations.
Roth analyst Irwin expects a more material update next quarter as new CEO Paul Rivera settles into his role and has time to review the company’s operations.
Meccanica’s shares were trading at US$2.46 on Friday afternoon.
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