What happened
Shares of Tritium DCFC (DCFC 6.74%) gained 36.4% in March, according to data from S&P Global Market Intelligence. The electric vehicle (EV) charging company was taken public through a merger with a special purpose acquisition company (SPAC) in January, and its share price has seen big swings in conjunction with market momentum following the combination.
The S&P 500 index climbed 3.6% last month, and the Nasdaq Composite index rose 3.4% across the stretch. Many companies with growth-dependent or otherwise speculative valuations saw big gains in the period, and companies in the EV and EV-charging spaces tended to be particularly big winners.
So what
Tritium stock soared in February after the company announced at the White House that it was opening a new manufacturing factory in Tennessee. Following this news, Tritium announced a partnership that will see it providing fast chargers for Wise EV's new national charging network.
The combination of these announcements prompted Tritium's share price to skyrocket, but it saw a steep pullback as investors took profits on the gains and bearish momentum for the broader market spurred big valuation pullbacks for companies with forward-looking valuations. With investors becoming more bullish and open to taking on risk in March, money poured back into the company's stock.
Image source: Getty Images.
Now what
Despite the explosive gains last month, Tritium's share price is still down roughly 38% from the lifetime high that it hit in February. The company now has a market capitalization of roughly $1.3 billion and is valued at approximately 7.7 times this year's expected sales.
The fact that Tritium's EV fast-charging technologies are already seeing real-world adoption is encouraging, and the company's forward price-to-sales multiple doesn't look particularly unreasonable given the huge room for long-term growth in the industry. On the other hand, investors should keep in mind that the company is coming fresh off of a SPAC merger, and that means that there's still relatively limited visibility into the company's business performance and other financials. Tritium DCFC could have big upside at current prices, but the stock also looks relatively high risk.
