Shares of Vietnamese electric vehicle (EV) maker VinFast Auto (VFS 1.40%) soared in Thursday's trading. After spiking as much as 23% higher, VinFast shares were still up by 16% as of 2:55 p.m. ET.
The previously relatively unknown EV company has been getting more publicity after its debut on U.S. public markets in August 2023. Now it is also getting more analyst coverage and global recognition, too.
Building its brand
VinFast will be included in the Vietnamese delegation to the United Nations summit on climate change beginning today in Dubai. Known as COP28, the summit will include a display of VinFast's VF 9 flagship SUV as well as participation by the vice chairwoman of VinFast's parent company Vingroup.
The vice chairwoman will participate in a panel discussion entitled "Strengthening Sustainable Supply Chain Resilience." It gives one of the lesser known global EV companies a global stage while it is ramping up production and getting ready to build its first manufacturing plant in the U.S. in North Carolina.
One analyst says to buy the stock
Analysts have also begun covering VinFast, and widely followed auto sector Wedbush analyst Dan Ives recently made a case for the stock. Ives initiated coverage with a buy rating and $12 price target on the stock. That would represent a nearly 60% gain from yesterday's closing price. It would also value VinFast with a market cap of about $25 billion.
VinFast expects to sell between 40,000 and 50,000 of its EVs in 2023, but Ives sees revenue growing from about $1.4 billion this year to $5.5 billion in 2025. Investors should realize that still leaves the stock's valuation at a relatively high price-to-sales ratio of more than 4.5 two years from now.
And that's assuming the company can successfully grow its brand over the next couple of years. Today's showcase at the COP28 climate summit is a good start, but investors would be wise to wait for more proof of success before jumping into this high-risk name.
