Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Kandi Technologies Stock Soared 55.9% in November

By Keith Noonan - Dec 7, 2020 at 10:03AM

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

The electric vehicle company enjoyed big share price gains last month, but is now embroiled in controversy.

What happened

Shares of Chinese electric vehicle company Kandi Technologies ( KNDI 5.84% ) gained 55.9% in November, according to data from S&P Global Market Intelligence. A solid third-quarter report and other indications of momentum in the electric vehicle space propelled its rise. 

^SPX Chart

^SPX data by YCharts

On Nov. 9, Kandi posted third-quarter results that topped the market's expectations for earnings; its share price also gained altitude as competitors delivered their own strong quarterly reports and received ratings boosts and target price upgrades from analysts. However, Kandi's stock slid later in November after a short-seller published a scathing report on the company's business and accounting practices. 

A Kandi Maple SUV.

Image source: Kandi Technologies.

So what

Kandi may have produced better-than-expected earnings, but its sales missed the market's target. The company posted a loss of $0.03 per share on sales of $18.72 million, while the average analyst had called for an $0.11 per share loss on revenue of $15.84 million.

Positive stock pricing momentum in the broader electric vehicle industry continued in the middle of the month, with XPeng getting a big pricing update from an analyst at Citi, and NIO beating expectations for third-quarter earnings. However, Kandi stock got hit hard after short-seller Hindenburg Research published a note late in November alleging that the auto company was inflating its reported sales. That note also resulted in substantial sell-offs for other foreign electric vehicle stocks. 

Now what

Kandi Technologies stock has continued to decline in December's trading. It's down nearly 7% for the month so far.  

^SPX Chart

^SPX data by YCharts

Investors are taking a more cautious approach to Kandi and other foreign electric vehicle stocks following Hindenburg Research's scathing analysis of the company's alleged sales and accounting practices. In response to Hindenburg's report, Kandi Technologies stated that the analysis contains numerous inaccuracies, and said it will provide a detailed refutation in the near future. 

Kandi Technologies has a market capitalization of roughly $578 million, and its share price remains up roughly 69% year to date despite the recent sell-offs. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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

Kandi Technologies Group, Inc. Stock Quote
Kandi Technologies Group, Inc.
KNDI
$3.54 (5.84%) $0.20
NIO Inc. Stock Quote
NIO Inc.
NIO
$32.10 (-0.16%) $0.05
XPeng Inc. Stock Quote
XPeng Inc.
XPEV
$45.22 (3.24%) $1.42

*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 service.

Stock Advisor Returns
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

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

Our Most Popular Articles

Premium Investing Services

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