What happened
Shares of Canoo (GOEV -6.18%) fell 20.7% in January, according to data from S&P Global Market Intelligence. The stock lost ground amid sell-offs for the broader market, and it ended the month setting a fresh 52-week low.
The market has been shying away from growth-dependent stocks amid looming interest rate increases and other risk factors, and many electric vehicle (EV) stocks have been caught up in the pullback. The S&P 500 index fell roughly 5.3% in January, and the Nasdaq Composite index ended the month down roughly 9%.
Image source: Canoo.
So what
While there wasn't much in the way of business-specific news for Canoo in January, Tesla reported earnings late in the month. The company delivered better-than-expected sales and earnings in the fourth quarter, but management also announced it won't release any new models in 2022 and that it was seeing ongoing supply chain issues. While the EV leader's stock saw turbulent trading immediately following its earnings release, Canoo stock climbed after the report and regained some ground late in January.
With its last update, Canoo management issued a target for operating expenses between $95 million and $115 million in the fourth quarter and projected capital expenditures to come in between $60 million and $80 million. The company is still gearing up to bring its products to market, and it's in a pre-revenue state that makes charting the performance outlook difficult. However, the company is getting ready to ramp up manufacturing, and investors are betting that the company will begin posting substantial sales in the near future.
Now what
Canoo stock has continued to slide early in February's trading. The company's share price is down roughly 7.6% in the month amid ongoing market volatility.
Canoo now has a market capitalization of $1.4 billion and is valued at approximately 10.5 times this year's expected sales. The company posted a net loss of $80.9 million last quarter, but it ended the period with cash and equivalent assets totaling $414.9 million.
The EV market still has huge room for growth over the long term, and there's a good chance that some smaller players in the space will be able to carve out lasting market positions. However, the overall market is becoming increasingly competitive, and Canoo stock looks risky even if could see big gains from current pricing levels.
