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Why Arcimoto Stock Skyrocketed 721.7% in 2020

By Keith Noonan - Jan 8, 2021 at 8:53AM

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This small electric-vehicle company was one of last year's biggest stock market winners.

What happened

Shares of Arcimoto ( FUV -7.62% ) soared 721.7% last year, according to data from S&P Global Market Intelligence. The electric-vehicle (EV) stock skyrocketed thanks to the company's dramatic sales gains and incredible momentum for the overall industry.

FUV Chart

FUV data by YCharts

2020 was a huge year for EV stocks, with large companies including Tesla and NIO posting incredible stock gains across the stretch. Some smaller players in the space also posted stellar share price gains, and Arcimoto closed out last year as one of the stock market's biggest winners. 

Two people riding on an Arcimoto Roadster.

Image source: Arcimoto.

So what

Arcimoto's stock gains in 2020 look even more impressive in the context of the company diluting the stock through new share offerings. The company's outstanding share count climbed roughly 39% last year, and its market capitalization soared approximately 1,810%. 

Ramping momentum for the business prompted a string of analyst upgrades and dramatic jumps for the company's share price. The biggest surge for the EV stock arrived in November after the company published third-quarter results that crushed the market's expectations. Sales for the period hit $683,895, up roughly 1,953% year over year. 

The company's Q3 loss in the period expanded from $4 million in 2019 to $4.6 million in last year's quarter, but the increase was trivial in the context of the massive revenue ramp up, and the company closed out the quarter with $17 million in cash and short-term equivalents (up from $5.8 million in the prior-year period) thanks to proceeds from the new share offerings. 

Now what

Arcimoto stock has continued to post strong gains early in January's trading. The company's share price is up roughly 18% in the month so far. 

FUV Chart

FUV data by YCharts

The EV market looks poised for big growth over the long term, and Arcimoto is still small enough that it could continue to deliver stellar stock gains if the company manages to continue scaling its business. However, investors should also keep in mind that publicly traded EV companies have seen incredible stock gains that raise concerns about whether valuations have become unreasonably stretched. 

Arcimoto has a market capitalization of roughly $532 million and is valued at approximately 24 times this year's expected sales. 

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.

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Stocks Mentioned

Arcimoto, Inc. Stock Quote
Arcimoto, Inc.
FUV
$9.45 (-7.62%) $0.78
Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$1,110.31 (-3.01%) $-34.45
NIO Inc. Stock Quote
NIO Inc.
NIO
$38.84 (-0.73%) $0.28

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

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