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Why Shares of Xos Soared 25.1% in March

What happened

After sinking more than 24% through the first two months of 2022, shares of Xos (NASDAQ: XOS) headed in the other direction last month and rose 25.1% in March, according to data from S&P Global Market Intelligence.

In addition to news regarding the delivery of vehicles to an important customer, the company's announcement of its fourth-quarter 2021 earnings, and an auspicious forecast for the start of 2022 electrified the bulls' excitement last month.

So what

The first catalyst for the stock's rise came on March 8, when the company announced that it had delivered three vehicles to UniFirst, a provider of uniform and protective clothing, at its southern California location. Xos plans on making additional deliveries of its electric trucks to UniFirst at its location in Boston during the second half of 2022. While the delivery of three vehicles is hardly transformational, investors recognize the company's achievement as an encouraging sign regarding the likelihood of further deliveries that are in the works. During an investor presentation in January, Xos reported that UniFirst -- as well as Cintas and Morgan Services -- have signed letters of intent for the purchase of up to 200 vehicles.

An electric truck at a charging station.

Image source: Getty Images.

Three weeks later, Xos gave investors more reason to celebrate. Reporting fourth-quarter 2021 revenue of $3.3 million, Xos beat analysts' expectations that the company would report $2.8 million on the top line. At the bottom of the income statement, investors found even more reason to smile; Xos reported earnings per share (EPS) of $0.07, notable higher than the $0.11 loss per share that analysts had anticipated.

But it wasn't only the road that the company had recently traveled that provided motivation to pick up shares last month, management's optimistic view of what lies ahead for Xos also resonated with investors. Management forecasts first-quarter 2022 deliveries of 40 to 55 vehicles and revenue of $4.5 million to $6.3 million. To put in perspective the significance of management's delivery forecast for Q1 2022, Xos reported deliveries of 32 and 44 units for Q4 2021 and the full-year of 2021, respectively.

Now what

While familiar names like Tesla, Nio, and Lucid Group may captivate the majority of the public's attention, it's important to recognize that the EV landscape is much more diverse than than popular luxury brands. The electrification of last-mile delivery trucks like those that Xos manufacturers are also in demand and should remain on the radars of potential EV-investors that have remained on the sidelines so far.

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool owns and recommends Nio and Tesla. The Motley Fool recommends Cintas. The Motley Fool has a disclosure policy.

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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