The tech sector meltdown of late February and early March has created golden buying opportunities in some of the world’s most innovative and transformative companies. One of them is Canoo (NASDAQ:GOEV), the nascent electric vehicle company that I view as maybe the most innovative EV company in the world today. GOEV stock has been slammed over the past few weeks — but all this sell-off does is increase the return potential of GOEV stock in the long run.
And that return potential is enormous.
On the assumption that Canoo will leverage its transformative modular skateboard technology and innovative subscription business model to fundamentally reshape the auto industry and turn into a major player in the EV world — which, in my opinion, is exactly what will happen — then my modeling suggests that GOEV stock could soar as high as $200 over the next 10 years.
That represents over 1,000% return potential.
Needless to say, that’s enough return potential that if you’re a fan of the exciting things going at Canoo today, you may want to buy GOEV stock on this big dip.
GOEV Stock: The EV Company from the Future
A lot of folks ask me why I’m so bullish on GOEV stock. The answer is simple: Because this is the EV company from the future.
That is, Canoo is hyper-focused on reimagining everything about the auto industry to create a new auto market that is smarter, safer, more efficient, more affordable, and ultimately, better.
It all starts, of course, with Canoo fundamentally rethinking the design of a legacy car.
The company has designed a proprietary and scalable modular skateboard platform that is uniquely designed to optimize the space of a vehicle. It has low floors, a wide base, and features the market’s first steer-to-wheel platform – which essentially removes all the motors from the hood of the car. This design allows Canoo to push the front two passenger seats right to the front of the vehicle, push out the sides of the vehicle right to the edge of the platform, and essentially eliminated all “wasted space” in a traditional car design.
Because this platform is scalable, it can used to create multiple new vehicle types.
There’s the lifestyle vehicle, which looks, acts, and feels more like a loft on wheels than a car. It’s spacious with a semi-circle “booth” in the back, tons of leg room, and tons of space for luggage, bags, bikes, etc. It’s also uniquely designed to be relaxed and worked in — not to be driven — and is therefore purpose-built for the era of self-driving wherein we will be relaxing and working in our cars, not driving them.
There’s the delivery vehicle, which is geometrically designed to maximize cargo volume per unit length. Indeed, when it comes to cubic meters of cargo volume per meter of length, Canoo’s delivery vehicle beats the competition by more than 10%. This allows the company to build smaller, cheaper delivery vans that can carry just as much cargo as their bigger, more expensive counterparts.
There’s also the pick-up truck. Same story here. Because the vehicle platform has zero wasted space, Canoo’s pick-up truck maximizes storage volume per unit length — which, as any truck owner will tell you, is a huge advantage.
Certainly, you get the point. By creating a transformative and highly-scalable EV skateboard platform that eliminates wasted space from a car, Canoo is in a great position to design a new generation of superior vehicles with a broad range of value-adds and applications.
More Than a New Car
Canoo’s innovation doesn’t stop with just making a new class of vehicles. It also includes a reimagination of how we buy and sell cars.
Traditionally, consumers either owned or leased a vehicle. Canoo is disrupting this status quo with a pure subscription model.
It’s basically a direct-to-consumer leasing model, without a down payment and with a minimum term of just one month.
Say you want a Canoo vehicle. You download the Canoo app. You apply to be a member. Once approved, you pick your Canoo vehicle and time frame in months. You go and pick-up your Canoo, pay to use it every month, and return it at the end of the subscription. Minimum term: Just one month.
This new “Transportation-as-a-Service” business model is genius for two reasons.
One, it’s significantly higher margin. Because Canoo essentially “re-sells” the same vehicle multiple times throughout its life, the company generates significantly more revenue per vehicle than a legacy OEM, on the same cost basis, leading to 4X the margins on each vehicle.
Two, it aligns with today’s consumer interests. Everything is a subscription these days. Your shopping with Amazon (NASDAQ:AMZN). Your movies with Netflix (NASDAQ:NFLX). Your music with Spotify (NYSE:SPOT). Your workouts with Peloton (NASDAQ:PTON). Your kids’ education with Chegg (NASDAQ:CHGG).
Why not your car?
Indeed, that’s the direction we are headed – and Canoo is leading the way. That, of course, is a bullish development for GOEV stock.
The Talent to Execute on the Vision
New class of technologically superior electric vehicles. New model for buying cars that better aligns with shifting consumer demand. All of that sounds great. But it’s also all meaningless unless Canoo has the talent to execute on the vision.
Make no mistake. If there’s one thing Canoo does not lack, it’s talent. This may be the most talented management team assembled in the EV space outside of Tesla (NASDAQ:TSLA) and maybe Lucid Motors (NASDAQ:CCIV).
Once upon a time, a company by the name of Faraday Future was widely considered to be Tesla’s biggest potential rival in the EV space, having recruited an army of super-talented engineers and designers to create a best-in-class premium EV. The company stumbled, mostly due to CEO-related problems, and most of the talent that made Faraday so great has since gone elsewhere.
A lot of that talent went to Canoo.
Canoo’s CEO is the former CTO of Faraday Future. Before that, he spent over 30 years at BMW and MINI, and was the development lead on the BMW i3, i8, and Z3.
The design lead at Canoo was once the VP of design at Faraday Future. The guy in charge of Canoo’s skateboard and body architecture is a former Tesla and SpaceX engineer who, you guessed it, was the director of body structure at Faraday Future. Vehicle trim lead Crhistoph Kuttner is a former Tesla engineer, too, who also led trim design at Faraday Future. And guess what? Same story with the guy in charge of vehicle architecture. He’s a former Tesla engineer, turned senior director of vehicle engineering at Faraday Future, turned vehicle architecture lead at Canoo.
The list goes on and on.
These are talented folks. They’re some of the most capable folks in the EV industry, with lots of experience. If any team is going to execute on Canoo’s vision of revolutionizing the auto industry, it’s these guys.
Canoo Stock to $200?
With the talent and vision, Canoo has what it takes to fundamentally disrupt everything we know about cars.
Does that mean Canoo is the next Tesla? No. I won’t go that far. But it does mean that, when all is said and done, Canoo has a really good chance to emerge as a major player in the EV market.
Assuming the company nabs between 1% and 2% of the consumer vehicle market and about 5% of the commercial vehicle market, then my modeling suggests Canoo is on track to net around $2.5 billion in profits by 2030.
Based on a 20X multiple, that implies a potential future valuation of $50 billion — and on the current share count, that implies a long-term price target for GOEV stock of $200.
Bottom Line on GOEV Stock
The tech sector meltdown has created multiple golden buying opportunities. GOEV stock is one such opportunity.
But it’s not the best opportunity.
Instead, the best opportunity is in a company that reminds me of a young Amazon. Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.
Which stock am I talking about?
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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