Please ensure Javascript is enabled for purposes of website accessibility

Why Arcimoto Stock Just Crashed 10.5%

By Rich Smith - Updated Aug 20, 2020 at 12:02PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sales and earnings both miss in Q2.

What happened

Shares of Arcimoto (FUV 0.31%), a Eugene, Oregon-based automaker of three-wheeled electric vehicles -- including the Fun Utility Vehicle, hence the stock ticker -- are down more 10.5% as of 10:25 a.m. EDT today. The drop follows the company's miss on both sales and earnings last night.

Heading into Q2, analysts had forecast that Arcimoto would lose $0.11 per share on about $270,000 in quarterly sales. Sales actually came close to hitting that goal at $268,500, but losses were significantly worse than expected, at $0.15 per share, because of "significantly higher cost of goods sold."  

Arcimoto's three-wheeled Fun Utility Vehicle

Arcimoto's three-wheeled Fun Utility Vehicle. Image source: Getty Images.

So what

Arcimoto says it plans to ramp up annual production to 50,000 electric vehicles within the next two years. And while management says in its report that "2020 continues to be a challenge to each of us in almost every way," sales are growing (albeit off a small base).  

One year ago, Arcimoto recorded only $8,514 in quarterly revenue for Q2 2019. This quarter, that number increased more than 3,000% -- though still falling short of estimates -- through the "continued sale of FUV and Deliverator products to customers that began in late 2019."

Now what

Going forward, production numbers should rise and take sales along with them, but it's going to be a long road to profits.

At last report, Arcimoto was producing about two vehicles per day and had built only a few more than 100 vehicles total. That's a long way from 50,000 per year. Still, as production rates accelerate, analysts are forecasting smaller and smaller net losses for Arcimoto and a turn to profitability in 2023.

Of course, looked at another way, that means Arcimoto is still as many as three years away from (maybe) earning any profit at all. Investors today, it seems, simply aren't willing to wait that long.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Arcimoto, Inc. Stock Quote
Arcimoto, Inc.
$3.24 (0.31%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.