With the S&P 500 down more than 2.2% today, individual companies are sinking hard as well. Take Arrival (NASDAQ:ARVL), for example. The electric vehicle manufacturer hit a 52-week low of $3.25 and is down more than 50% year to date. Arrival made its public debut last year after merging with special purpose acquisition company (SPAC) CIIG Merger Corp at a $13 billion valuation. Now, Arrival’s market capitalization is only $2.3 billion.
Arrival seeks to provide zero-emission electric buses and vans. However, Arrival is still in the early stages of its business. During the third quarter, the company reported that it expects costs to increase due to battery, raw material and initial factory expenses. Arrival is also unprofitable. It reported a loss of 26 million euro, which was 4 million euro greater year over year.
However, Arrival has a lot planned for 2022. For starters, the company plans on starting bus production at its Rock Hill micro-factory in the second quarter. The company’s Bicester micro-factory in Britain is also expected to start producing vans by the third quarter. Arrival currently has a total of 64,000 non-binding orders and letter of intents (LOIs) for its EVs. On top of that, Arrival recently introduced a “super minimal” EV prototype in a collaboration with Uber (NYSE:UBER).
It’s not a major surprise that ARVL stock is facing volatility since the company is just getting started in its EV journey. With that in mind, let’s take a look at Arrival stock price predictions for this year.
Arrival (ARVL) Stock Price Predictions
- Cowen has a price target of $28.50. Analyst Jeffrey Osborne believes that Arrival’s “technology and strong value proposition for short-haul commercial operators warrants a premium to other less vertically integrated competitors.” By fiscal year 2023, Osbourne expects Arrival to generate nearly $5 billion in revenue.
- Barclays has a price target of $20. Analyst Brian Johnson believes that if Arrival’s micro-factory venture is successful, it could “revolutionize vehicle manufacturing.” The analyst formulated his price target from a 15.9x EV/EBITDA multiple and 2.2x price-sales (P/S) multiple based on 2025 estimates. Finally, Johnson points out that since Arrival is still in its early stages, investors should be wary of “upstart/scaling risk.”
- Berenberg has a price target of $17. Analyst Michael Filatov notes that Arrival differentiates itself by “its innovative approach to manufacturing via a highly automated and vertically integrated micro-factory model.” The analyst also adds that Arrival’s micro-factory strategy will help it lower costs and production times relative to traditional plants. In addition, Filatov believes that Arrival “has the potential to disrupt the legacy automotive model.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.