Canoo Paddles Harder, Rivian Riptides & Lowe’s Floats Upstream
The Ol’ Canoo Switcheroo
Great Ones, you ever wonder what cars would look like if kids designed them? No, I’m not talking about Tesla’s (Nasdaq: TSLA) Cybertruck. That was designed by a man-child…
I’m talking about Canoo (Nasdaq: GOEV) and its “Lifestyle Vehicle.” Aside from its absolutely horrible name, Canoo’s flagship vehicle is actually pretty cool:
OK, maybe not that cool. This Canoo van — sorry, “Lifestyle Vehicle” — looks like a child’s push toy. It looks like Fisher Price or Little Tikes led the design team … like a pre-school Power Wheels offering.
I kid, but underneath its “I exclusively wear Eddie Bauer flannels and Ugg boots” themed exterior is something rather revolutionary, even for the electric vehicle (EV) world.
You see, Canoo’s EVs run on what the company calls a “skateboard” platform. Sit down, Tony Hawk. You’re close yet far … we’re not cranking up the CKY or Less Than Jake today. It’s not that kinda skateboard.
Canoo’s “skateboard” refers to the platform the EV sits on. This platform includes the battery, the motors, steering, brakes, wheels and other necessities. By using this “skateboard” design, Canoo can put whatever it wants on top.
In the example above, we see a van. But Canoo could just as easily drop a coupe or family sedan on top of its EV skateboard platform. Pretty cool, right?
This design allows Canoo to increase production due to the uniformity of the skateboard base, while also increasing vehicle diversity and customization by allowing Canoo to swap tops on the fly.
That’s all fine and dandy, Mr. Great Stuff, but it doesn’t explain why GOEV spiked more than 15% this morning. What’s the deal, man?
I was just getting to that!
After the close last night, Canoo reported third-quarter earnings. Like many EV startups, Canoo doesn’t have any revenue. It hasn’t even produced a vehicle yet.
But financial results were still better than expected, with Canoo losing only $0.35 per share compared to expectations for a $0.44 per-share loss.
Now, that loss could still have inspired a 15% rally … it’s been that kinda year, ya know. But there’s more driving GOEV investors today.
First, Canoo announced that it scored $100 million in incentives to build its headquarters and R&D facility in Arkansas and to add additional facilities near its in-progress Oklahoma factory.
Second, Canoo bumped up the timeline for its first production EV. The “Lifestyle Vehicle” wasn’t supposed to roll off the assembly line until mid-to-late 2023. During yesterday’s earnings call with investors, Canoo bumped EV production forward to “before the fourth quarter of 2022.”
That’s like a full year earlier. No wonder investors are happy with GOEV stock today!
But there was one final note that investors need to know before making a decision on GOEV stock.
Canoo warned that it expects capital expenditures of $60 million to $80 million for the fourth quarter.
Spending that much moolah when you don’t have any revenue could make some investors nervous, but Canoo is spending this cash on expansion.
With a production factory, headquarters, R&D facility and additional support offices … Canoo is paddling like crazy right now.
In other words, it’s gonna be a while before the company sees revenue and turns a profit.
Personally, I absolutely love Canoo’s “skateboard” idea. The ease of manufacturing. The customizability. The ability to redesign the look of a vehicle without changing the entire thing. This seems like a brilliant idea.
But it remains to be seen whether EV customers will feel the same way.
If you’re thinking about investing in GOEV stock, don’t chase today’s rally. Wait for a better entry price. And, once again, remember that it will be a while before actual revenue starts rolling in.
In Other EV News…
A former Tesla employee just released a brand-new innovation promising to make every EV out there instantly obsolete. He created the first working Tesla battery. Now he’s about to change everything again!
And it goes beyond cars … his new technology is rolling out to power 50 million homes and businesses, setting up a new market 10X bigger than EVs. And you can buy in right away.
Going: As Above, So Be Lowe’s
The Al Borland to Home Depot’s Tim Taylor, Lowe’s (NYSE: LOW) is never one to be outdone — especially not during earnings season. And Lowe’s nailed it with its latest report, sending LOW shares soaring a whole 2% this morning. Don’t go crazy, LOW…
Per-share earnings hit $2.73 and handily topped estimates for $2.36. Revenue also took off like a shot, reaching $22.92 billion and beating expectations for $22.06 billion with room to spare.
Lowe’s overall same-store sales growth of 2.2% beat Wall Street’s Negative Nellies’ expectations for a 1.5% decline.
The company specifically shouted out “home professionals” for its growth on the quarter, which in this case means people who renovate, repair and refinish homes professionally … not at-home professionals trying to YouTube a drywall tutorial.
Just as Home Depot and Lowe’s pivoted earlier in the pandemic to cater to the stuck-at-home crowd, now the DIY duo must regain all those contractors and renovators who were seemingly “back-burnered” during the pandemic.
When the cats go back outside and away, contractors come to … umm … fix stuff and play? Yeah, let’s run with that.
Lowe’s highlights that “home professionals” are still steadier and higher-paying customers than their remote-working amateur DIY counterparts. Targeting these more frequent buyers is Lowe’s best way to keep its pandemic-propelled success going.
I reckon Lowe’s reasoning checks out: The only time I’m ever a steady shopper there is a return run to buy what I forgot the first time ‘round … and ditto for the trip after that.
Going: Target Takes Aim … And Misses?
Great Ones… Unfortunately, it doesn’t always pay to do the right thing. Just ask Target (NYSE: TGT), or as I like to call it: “Yuppie Walmart.”
You wouldn’t know it by looking at TGT’s 5% sell-off today, but the bullseye handed Target investors a double beat, with revenue and earnings coming in higher than projected.
Not only did Target report an adjusted profit of $3.03 per share — beating estimates by a full $0.20 — but comparable store sales rose 12.7% compared to the 8.2% analysts thought they’d get.
To top it off, Target’s been gearing up for the holiday shopping rush and developed a plan to deal with ongoing supply chain issues. Said plan includes chartering ships that only transport Target items, unloading items off those ships at off-peak times and sending all of Target’s goods to less-traffic-heavy ports, where they can then get distributed.
Neat! So, why’s Target stock down 5% today?
Well, you see, Great Ones … Target appears to care about its customers. And Wall Street doesn’t like what that means for profits one bit.
Basically, instead of hiking prices due to inflation, Target is absorbing higher costs rather than offloading them to customers.
Here’s what Target’s CEO Brian Cornell had to say about it in a call with reports this morning:
So, good guy Brian knows there will eventually be an end to these price hikes and tries to score loyalty points with Target shoppers in the interim. But Wall Street punishes Target for its long-term pricing position because short-term profits are more important than long-term loyalty and happy customers.
Now, excuse me while I get some reasonably priced mouthwash to rinse away all this bitterness…
Gone: Don’t Go Chasing Rivian Rallies
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness … for Rivian (Nasdaq: RIVN) rally chasers, that is.
After going public in one of the biggest IPOs this year, EV maker Rivian finally glimpsed the dark side of the moon when shares sank more than 15% after the market opened for trading.
Hailed as the potential Tesla (Nasdaq: TSLA) terminator, Rivian caught the attention of investors who wanted to park their money in more of the EV market … but didn’t necessarily want to pay top Tesla prices to do so.
Thing is, Rivian is a 12-year-old startup that has yet to bring any revenue to the table. And at its current $140 billion valuation, Rivian is already being priced ahead of tried-and-true car companies like Ford and Volkswagen … you know, companies that actually have not just cars, but actual EVs on the road today.
I’m not saying that Rivian doesn’t have the potential to rival bigger and badder EV makers. Even Tesla had to contend with being the new kid on the block circa 2010 … and we all know how people felt about Tesla when it first went public. Heck, some people still feel that strongly about Elon and his EV escapades.
What I’m saying is that you don’t go chasing stock rallies (or waterfalls) for a company that doesn’t have any products to sell and that has only made a handful of trucks for its own employees to joyride in. *Cough* Nikola. *cough*
If you like Rivian and want to pick up a few shares, I’d wait until RIVN stock comes back down to Earth — and, more importantly — until the company starts production on those EV pickup trucks everyone is thirsting for.
A week ago, we were up to all sorts of ESG shenanigans — those environmental, social and governance criteria that retail and Wall Street investors use to pick stocks these days. Well … at least some of you are into ESG investing.
Only 25.9% of you are investing in those (allegedly) green pastures, and you’ll have to let me know in the inbox which ESG picks you’re trading.
A pragmatic 59.3% of you only care about the green in your portfolio — wherever it comes from. ESG also stands for “extremely sick gainz” … right?
And the final 14.8% of you either have no need for any of that globally socially conscious stuff around here … or are still wondering if ESG is how Bruce Willis invested with the dead in the Sixth Sense.
Now, on to bigger and better things: a brand-spanking-new poll for you to answer!
It’s been approximately three minutes since we last asked for your thoughts on EVs, and that’s far too long in Great Stuff land. So, back to the EV arena we romp.
Don’t mention Tesla. Don’t mention Tesla…
No, no, I want your opinion on a different EV craze today (finally). And it’s not Canoo, either. In the past week, we’ve seen Rivian rev up EV investors’ appetites for rallying destruction. And we’ve about seen as much Lucid-ity as you’ll ever find in Great Stuff…
But did any of you EV investors actually, well, invest in these EVs? Click below and let me know:
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I know, I know, such a not-Great Stuff kinda question! Chase stock market rallies? Who would do such a thing?!
Many of you, actually … so let me know what trading craziness you’re getting up to, capisce? Go on, spin the yarn a little and drop us a line! We’re just one day and a wake-up away from Reader Feedback day, so scramble, scramble, scramble!
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Until next time, stay Great!
Editor, Great Stuff