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REE Automotive (REE)
NASDAQ:REE
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REE Automotive
(NASDAQ:REE)
45Neutral
Positive Factors
Market Expansion
The combination of Motherson’s supply chain and distribution partnership, improved access to financing sources, and ramp in customer orders by 230% to $137M has transformed the outlook for the company.
Revenue Growth Potential
The announcement highlighted that the parties intend to sign a definitive agreement by end of 2025, which could generate up to $770M in potential revenues by 2030.
Technological Advancements
The company highlighted that three new OEMs are considering REE corners, opening up an opportunity to license its full by-wire (XBW) technology across vehicle classes.
Negative Factors
Capital Requirements
Should there be unexpected delays more capital may need to be raised before profitability is reached.
Financial Challenges
The 3Q24 net loss was negatively impacted by a $14.4M warrant re-measurement charge.
Risk Factors
Risks include dilution risk, market adoption risk, technological risk, execution risk, partnership risk, regulatory risk, supply chain risk, competition risk, and uncertainty related to macroeconomic conditions.
REE Automotive (REE) vs. S&P 500 (SPY)
Market Cap
$77.23M
Dividend YieldN/A
Average Volume (3M)110.50K
Price to Earnings (P/E)―
Beta (1Y)3.31
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees244
SectorConsumer Cyclical
Sector Strength50
IndustryAuto - Recreational Vehicles
Share Statistics
EPS (TTM)-9.26
Shares Outstanding25,304,585
10 Day Avg. Volume263,537
30 Day Avg. Volume110,495
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)95.54
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.00Price Target Upside445.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
REE Automotive Business Overview & Revenue Model
Company DescriptionREE Automotive (REE) is an Israeli-based automotive technology company that specializes in the development of electric vehicle platforms. The company focuses on creating modular and scalable EV platforms that integrate all the critical vehicle components into the arch of the wheel. This innovative approach allows for more design freedom, increased payload capacity, and enhanced efficiency, catering to a broad range of vehicle types from commercial vehicles to autonomous delivery solutions.
How the Company Makes MoneyREE Automotive generates revenue primarily through the sale and licensing of its electric vehicle platforms to automotive manufacturers and fleet operators. The company's revenue model is centered around providing customizable and scalable EV platforms that manufacturers can adapt to create various types of electric vehicles. REE also engages in strategic partnerships and collaborations with industry leaders to co-develop and promote its technology. Additionally, the company may earn income from service agreements and maintenance contracts associated with its platform technologies.
REE Automotive Financial Statement Overview
Summary
REE Automotive faces significant financial challenges, with negative profitability and cash flow issues, despite maintaining a manageable debt level.Income Statement
REE Automotive shows significant challenges in profitability and revenue generation. The gross profit margin and net profit margin are both negative, indicating that the company spends more on production and operations than it earns in revenue. Revenue growth is inconsistent, with significant fluctuations over the years. Despite slightly improved EBIT and EBITDA margins in recent periods, they remain negative, reflecting ongoing operational inefficiencies and losses.25
Negative
Balance Sheet
The balance sheet reflects a moderately leveraged position with a manageable debt-to-equity ratio, as total debt is relatively low compared to stockholders' equity. However, the declining equity ratio indicates a weakening financial structure, with liabilities growing faster than equity. The return on equity is negative due to consistent net losses, which is a concern for shareholders.40
Negative
Cash Flow
REE Automotive's cash flow situation is challenging, with a persistent negative free cash flow and operating cash flow. The operating cash flow to net income ratio suggests that cash outflows from operations exceed net income, indicating operational inefficiencies. However, the company has managed to secure substantial financing, providing some liquidity to support ongoing operations.30
Negative
| Breakdown | ||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 626.00K | 1.61M | 0.00 | 6.00K | 388.00K | Gross Profit |
| -4.45M | -7.46M | -547.00K | -989.00K | -259.00K | EBIT |
| -94.51M | -119.89M | -127.97M | -515.50M | -68.10M | EBITDA |
| -85.96M | -114.09M | -100.76M | -503.56M | -67.93M | Net Income Common Stockholders |
| -109.69M | -114.21M | -107.42M | -505.33M | -67.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 77.49M | 85.63M | 153.62M | 275.77M | 46.37M | Total Assets |
| 130.24M | 137.90M | 215.01M | 292.94M | 49.01M | Total Debt |
| 38.66M | 38.68M | 21.37M | 0.00 | 0.00 | Net Debt |
| -14.95M | -2.56M | -35.39M | -275.77M | -44.71M | Total Liabilities |
| 59.90M | 59.83M | 39.60M | 42.53M | 3.23M | Stockholders Equity |
| 70.34M | 78.08M | 175.41M | 250.40M | 45.78M |
| Cash Flow | Free Cash Flow | |||
| -80.81M | -93.02M | -123.64M | -61.55M | -13.66M | Operating Cash Flow |
| -77.59M | -89.27M | -112.58M | -59.14M | -13.06M | Investing Cash Flow |
| 46.99M | 49.62M | -106.83M | -748.00K | -2.26M | Financing Cash Flow |
| 84.13M | 23.97M | 2.43M | 291.30M | 33.12M |
REE Automotive Technical Analysis
Negative
2.75
Price Trends
6.96
Negative
7.68
Negative
6.28
Negative
Market Momentum
-1.10
Positive
19.65
Positive
6.37
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REE, the sentiment is Negative. The current price of 2.75 is below the 20-day moving average (MA) of 5.05, below the 50-day MA of 6.96, and below the 200-day MA of 6.28, indicating a bearish trend. The MACD of -1.10 indicates Positive momentum. The RSI at 19.65 is Positive, neither overbought nor oversold. The STOCH value of 6.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REE.
REE Automotive Risk Analysis
REE Automotive disclosed 82 risk factors in its most recent earnings report. REE Automotive reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
REE Automotive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | $12.26B | 11.12 | -0.55% | 3.78% | 1.42% | -20.63% | |
54 Neutral | $14.72B | ― | -60.48% | ― | 12.09% | 17.65% | |
45 Neutral | $77.23M | ― | -190.08% | ― | ― | ― | |
40 Underperform | $1.81M | ― | -72.67% | ― | 258.96% | 82.54% | |
38 Underperform | $19.85M | ― | -129.17% | ― | 141.23% | 69.50% | |
37 Underperform | $7.03B | ― | -54.15% | ― | 35.71% | 8.24% |
* Consumer Cyclical Sector Average
Performance Comparison
REE
REE Automotive
2.75
-3.17
-53.55%
NKLAQ
Nikola
0.24
-30.66
-99.22%
GOEVQ
Canoo
0.12
-77.28
-99.84%
LCID
Lucid Group
2.32
-0.54
-18.88%
RIVN
Rivian Automotive
12.41
1.32
11.90%
REE Automotive Earnings Call Summary
Earnings Call Date: Dec 17, 2024 | % Change Since: -74.95% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call for Q3 2024 highlighted significant achievements, including a substantial increase in reservation value and the commencement of P7 truck production. The company's improved liquidity and strong partnership with Motherson are positive developments. However, there were notable challenges, such as an increase in both GAAP and non-GAAP net losses. Overall, the sentiment is positive given the company's progress and strategic advancements.Highlights
Significant Increase in Reservation Value
The reservation value more than doubled from $60 million to almost $140 million in one quarter, indicating strong demand for REE's products.
Production of P7 Trucks Commenced
Production of the P7 trucks has started, with plans to deliver to North American customers in the first half of 2025.
Improved Liquidity
Liquidity improved by 47% quarter-over-quarter, reaching $88.8 million at the end of Q3, supported by credit facilities and investments.
Strong Partnership with Motherson
The partnership with Motherson is progressing smoothly, supporting production supply chain management and improving supplier payment terms.
Growing Interest in Software-Defined Vehicle Technology
There is increasing interest from OEMs in REE's software-defined vehicle technology, with discussions progressing faster than anticipated.
Lowlights
Increase in GAAP Net Loss
GAAP net loss increased to $38.5 million in Q3 2024 from $10.8 million in Q2 2024, driven by noncash remeasurement of warrants and derivatives.
Non-GAAP Net Loss Increase
Non-GAAP net loss was $16.8 million in Q3, compared to $12.4 million in Q2 2024, impacted by a $5.7 million R&D tax credit recognized in the previous quarter.
Company Guidance
During the REE Automotive Q3 2024 earnings call, the company provided optimistic guidance, highlighting several key metrics. REE reported a significant increase in reservation value, doubling from $60 million to $137 million in one quarter, representing over 900 P7 EVs from 30 different customers across North America. The company also improved its liquidity by 47% quarter-over-quarter, reaching $88.8 million. Production of the P7 trucks has commenced with plans to deliver the first units in North America by the first half of 2025. REE's strategic partnerships, particularly with Motherson, are expected to optimize supply chain management and improve material margins. The company aims to reach bill of material (BOM) breakeven in the second half of 2025 with the production of a few hundred vehicles. Additionally, REE secured $33 million in credit facilities to support its production ramp, and its strong balance sheet is backed by top-tier commercial banks.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.