Penny stock (learn more about penny stocks here) Canoo (NASDAQ:GOEV) dropped nearly 30% in Monday’s after-hours trading. The EV (electric vehicle) startup released its fourth-quarter financials and provided a 2024 revenue outlook that fell short of analysts’ estimates. Further, concerns around liquidity and funding remained a drag.
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The company warned that if it fails to secure adequate additional funding, it may not be able to carry out its business plans, potentially leading to the termination or downsizing of its operations.
While Canoo reduced losses in Q4 and 2023, it’s still in the early revenue generation phase. This implies that Canoo could continue to burn cash and require additional funding to remain afloat amid lower EV demand.
Canoo’s Financials
GOEV delivered negative adjusted EBITDA of $54.6 million in Q4, down from a loss of $60.5 million in the prior-year quarter.
Net loss was $29 million in Q4 and $302.6 million in 2023, which compared favorably with the previous year. Notably, Canoo reported a loss of $80.2 million in Q4 of the prior year. Moreover, its net loss stood at $487.7 million in 2022.
Net cash used in operating activities was $251.1 million in 2023 compared to $400.5 million in 2022, a significant improvement over the prior year. The company had a cash balance of $6.4 million.
Outlook Remains a Drag
Canoo expects its total revenue to be between $50 million and $100 million in 2024. In comparison, analysts’ consensus estimate stood at $152.5 million. While the company’s top-line forecast came below the Street’s expectations, concerns over liquidity and the company’s ability to continue to operate remained a drag.
Is GOEV Stock a Good Buy?
GOEV stock has fallen about 73% in one year. The company’s continued cash burn, macro headwinds impacting EV demand, and uncertainty over funding have weighed on its share price.
Despite the challenges, Wall Street is bullish about its prospects due to the company’s production ramp-up and robust order backlog. Moreover, its focus on cost savings augurs well for long-term profitability. Three analysts cover GOEV stock, and all recommend buying it.
