Key Takeaways From Arcimoto (FUV) Q2 Results & Business Updates

Arcimoto FUV, a maker of specialty electric three-wheeled vehicles, released its second-quarter 2023 results yesterday. Revenues were up 17% year over year to $1.76 million. First-half revenues surged 45% year over year to $3.1 million compared with $2.1 million in the corresponding period of 2022.

In the quarter under review, the company incurred a net loss of around $13.2 million, translating to $1.71 per share, which narrowed from $17.4 million, or $8.80 per share, in the corresponding period of last year.

Arcimoto produced 94 new fun utility vehicles (FUVs) in the first half of the year and reached a significant milestone by rolling out its 1,000th vehicle in June 2023.

Second-quarter deliveries totaled 65 units, with an average price of $22,744. Cumulatively, 102 vehicles have been delivered this year. Furthermore, Arcimoto's footprint on the roads has expanded, with 665 customer-owned FUVs, 39 vehicles dedicated to marketing, research and development, and internal fleet use, and an additional 90 vehicles forming the Arcimoto rental fleet for revenue generation.

As part of its commitment to innovation, Arcimoto introduced Modern Utility Vehicle – a pioneering addition to its lineup of small footprint electric vehicles, designed for professional and commercial applications.

Early this week, Arcimoto joined forces with MATBOCK to provide electrical systems architecture and energy storage solutions for hybrid-electric tactical vehicles. This partnership empowers MATBOCK to focus on delivering innovative technology for specific U.S. Department of Defense operations. As part of its tactical electric vehicle program launched in 2022, MATBOCK is incorporating cutting-edge battery, propulsion and exportable power solutions. This collaboration not only underscores the integration of electric vehicle technology in military contexts but also aligns with Arcimoto's commitment to advancing green energy solutions.

As of Jun 30, 2023, FUV had $53.1 million in total assets, $1.3 million in cash/cash equivalents, and total liabilities of $32.7 million.

To address its financial challenges, Arcimoto has put several of its properties up for sale in Eugene. The company aims to secure much-needed funds and navigate its path to profitability.

CEO Chris Dawson revealed that the property sale would be contingent on a lease-back arrangement, allowing Arcimoto to retain operational control over certain spaces while freeing up capital. The decision aligns with the company's efforts to optimize its resource allocation for manufacturing while streamlining costs.

In 2021, Arcimoto had invested $12.75 million to acquire multiple properties in Eugene, with the goal of expanding production capabilities. However, despite an initial market capitalization surge beyond $1 billion in early 2021, the company faced challenges in achieving substantial sales and cost-effectiveness. Consequently, as investor sentiment shifted against unprofitable ventures, Arcimoto's stock price declined and financial constraints emerged.

Amid these circumstances, Arcimoto's proactive strategy involves concentrating on bolstering sales and establishing new corporate partnerships for fleet deliveries. Following manufacturing process enhancements, the company is striving to attain operational efficiency.

The property sale initiative underscores Arcimoto's commitment to unlocking value from its real estate holdings, enabling the company to extend its operational runway and pursue its objectives with greater financial stability. By divesting non-essential assets and focusing on core manufacturing and sales activities, Arcimoto aims to navigate the challenging landscape and ultimately achieve sustained growth.

While the journey to profitability remains challenging, Arcimoto's responsiveness to its financial situation and strategic realignment indicate its determination to rebound in the competitive electric vehicle market.

Zacks Rank & Key Picks

Arcimoto currently carries a Zacks Rank #3 (Hold).

A few top-ranked stocks in the auto space include Gentex GNTXCommercial Vehicle Group CVGI and Allison Transmission ALSN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GNTX’s 2023 sales and EPS implies year-over-year growth of 17.3% and 29.4%, respectively. The earnings estimate for 2023 has been revised upward by 7 cents in the past 30 days.

The Zacks Consensus Estimate for CVGI’s 2023 sales and EPS implies year-over-year growth of 4.05% and 102%, respectively. The earnings estimate for 2023 has been revised upward by 8 cents in the past 30 days.

The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.4% and 25.3%, respectively. The earnings estimate for 2023 has been revised upward by 39 cents in the past 30 days.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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