Mullen Automotive (NASDAQ:MULN) stock is grabbing eyeballs. Its low share price and positive developments like the reduction of debt and exclusive rights to sell I-GO, a compact urban delivery EV, in the European markets have garnered investors’ interest in the shares of this electric vehicle (EV) maker. However, MULN is still in its early stages, and its stock could remain highly volatile.
Is Mullen Automotive Stock a Good Buy?
While Mullen Automotive has recovered from its 52-week low of $0.21, it is still down about 94% year-to-date. Given the massive decline, Mullen Automotive stock is looking incredibly cheap. It’s also worth highlighting that Mullen has eliminated $13 million in debt and lowered its overall indebtedness to less than $10 million from over $30 million a year ago.
Apart from strengthening its balance sheet, Mullen also secured exclusive sales rights for I-GO in select European markets like the U.K., France, Germany, Ireland, and Spain. This presents revenue-generating opportunities for the company.
While the recent developments are positive, our concern is around access to capital, and equity dilution as the company is in a development stage. Also, increased competition poses a challenge. Given the challenges, MULN stock could stay volatile in the coming months.
Bottom Line
The company’s focus on ramping up production, signing an exclusive sales deal, reduction of debt, and secular industry tailwinds will likely support Mullen Automotive stock. However, given the near-term concerns, investors with greater risk tolerance should invest in MULN stock.
On TipRanks, MULN stock has a Smart Score of two out of 10, implying a weak outlook.
Moreover, if Penny Stocks like MULN attract you, consider using our Penny Stocks Screener to find the best investment ideas.
