Are Shares of Electric Vehicle Stock AYRO a Buy?

AYRO’s (AYRO) purpose-built zero-emission electric vehicles are on the cusp of breakthrough growth amid an eco-friendly vehicle revolution. Let’s find out if now is the right time to invest in AYRO based on its latest developments.

AYRO, Inc. (AYRO) designs and builds compact, light-duty, electric vehicles (EVs) for commercial use and urban commute covering short distances. The company is in the process of rolling out next-generation purpose-built EVs in the market.

AYRO’s innovative electric trucks are well-suited for a world that is growing more concerned about the environment and desirous to reduce people's carbon footprints. The company’s compelling product portfolio, and its unique and expansive distribution network have helped the stock gain 55% year-to-date. This impressive performance and potential upside based on several other factors has helped AYRO earn a “Buy” rating in our proprietary rating system. 

Here’s how our proprietary POWR Ratings system evaluates AYRO:

Trade Grade: A

AYRO is currently trading above its 50-day and 200-day moving averages of $3.78 and $3.48, respectively, indicating that the stock is in an uptrend. Also, the stock has seen dramatic gains over the past three months, reflecting solid short-term bullishness.

AYRO’s revenue increased 46.4% year-over-year to $388,654 in the third quarter ended September 2020. The increase in revenue was primarily attributable to the significant increase in the production at the Austin facility. Net income from the ‘Other’ segment rose 1,432.7% from the year-ago value to $17,503, while EPS increased 83.1% from the same period last year.

The company has recently entered into a strategic partnership with Karma Automotive’s Innovation and Customization Center to deliver over 20,000 light-duty trucks and electric delivery vehicles over the next three years. This partnership will allow AYRO to address market-specific needs and serve a wide range of industries.

AYRO announced the deployment of initial orders of the Club Car 411 EVs to serve a military medical campus in the northeast US. This will provide the company with an opportunity to establish itself as a dominant manufacturer of purpose-built, low-speed EVs for the commercial fleet market.

Buy & Hold Grade: C

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade takes into account, AYRO is not positioned well. The stock is currently trading 31.6% below its 52-week high of $10.60, which it hit on November 23rd. This can be attributed to the fact that the company is still in its production stage.

Peer Grade: D

AYRO is currently ranked #21 out of 34 stocks in the Auto & Vehicle Manufacturers industry. Other popular stocks in this industry are Tesla, Inc. (TSLA), General Motors Company (GM) and ADOMANI, Inc. (ADOM)

While TSLA and ADOM beat AYRO by gaining 579.9% and 271.6% year-to-date, respectively, GM returned 21.8% over this period.

Industry Rank: A

The Auto & Vehicle Manufacturers industry is ranked #3 out of the 123 industries. The companies in this industry manufacture and sell electric vehicles, passenger cars, light trucks, motorcycles, and more. 

Although the outbreak of the coronavirus pandemic lowered purchase of vehicles, the demand is expected to rise again as the United States enters the recovery phase. As countries around the world push new programs to encourage consumers to buy battery-powered vehicles, the electric vehicle industry should witness a continuous surge in demand.

Overall POWR Rating: B (Buy)

AYRO is rated a “Buy” due to its impressive financials, short-term bullishness and underlying industry strength, as determined by the four components of our overall POWR Rating.

Bottom Line

AYRO is well positioned to soar in the upcoming months despite gaining 55% year-to-date. As the company increases its production capacity and flexibility to meet EV demand locally, the stock is expected to skyrocket, allowing investors to generate substantial capital gains.

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AYRO shares were trading at $6.82 per share on Thursday afternoon, down $0.43 (-5.93%). Year-to-date, AYRO has gained 55.00%, versus a 15.56% rise in the benchmark S&P 500 index during the same period.

About the Author: Imon Ghosh

Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization.


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