Suffice it to say, electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) hasn’t received a lot of love on Wall Street. Yet, after a prolonged drawdown, MULN stock’s comeback could be right around the corner. Mullen Automotive is making progress operationally and is at least showing some improvement on the financial front.
It’s no secret that Mullen Automotive has to deal with intense competition in the EV space. Plus, Mullen is attempting to market its vehicles during a time of economic uncertainty.
Therefore, let’s not judge Mullen Automotive too harshly. Considering the circumstances, I’d actually say Mullen is demonstrating surprising resilience. With that in mind, let’s take a look at three reasons to consider a small but confident share position in MULN stock.
Mullen Automotive Provides Encouraging Operational Updates
First and foremost, Mullen Automotive released important updates that indicate the automaker’s progress in serving important clients. For example, Mullen has a $680,000 contract to install Energy Management Modules (EMMs) on a Washington, D.C., city government vehicle fleet. Mullen Automotive expects to complete testing and installation “on a total of 40” of these vehicles “over the next few weeks.”
Also, Mullen Automotive recently delivered its first Class 3 demonstration vehicle to Randy Marion Automotive (RMA), an automotive dealer in North Carolina. The vehicle is a Mullen THREE, which is priced at $68,500. RMA had previously placed a purchase order for 1,000 Class 3 vehicles with Mullen Automotive.
Bottom-Line Improvement Bodes Well for MULN Stock
Clearly, RMA is a significant client of Mullen Automotive. The automaker has, so far, “received $279 million in purchase orders for Mullen Class 1 and Class 3 EV Vans and Trucks” from RMA. Without a doubt, these purchase orders have bolstered Mullen Automotive’s bottom line.
Speaking of Mullen Automotive’s bottom line, it’s far from perfect, but it’s definitely improving. In 2022’s first quarter, Mullen reported a net loss attributable to common shareholders after preferred dividends of $357.34 million, and a staggering net loss per share of $173.83. In this year’s first quarter, Mullen Automotive improved those figures to $106.87 million and $1.30, respectively.
Mullen Automotive Augments Its Capital Position
Furthermore, Mullen Automotive has enhanced its capital position, which should help the automaker deliver on its operational objectives. Again, it should be emphasized that Mullen’s financial improvement should be considered in its context. These are challenging times for EV makers, so any progress is commendable.
Here’s the rundown. As of March 31, 2022, Mullen Automotive had cash, cash equivalents and restricted cash totaling around $65.282 million. A year later, that figure increased to $86.747 million. Thus, Mullen Automotive’s capital position grew by around 33% in a year’s time.
This is an encouraging sign, but it doesn’t mean you have to go all-in on MULN stock right now. It’s risky to invest in an EV startup, so be sure to maintain a proper position size. Still, at least you now have three reasons to consider taking a small but confident stake in Mullen Automotive.
On the date of publication, David Moadel did not have (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.
