Face drive (TSXV: FD) This year’s stock price surged nearly 300%, and carpooling stocks returned more than 900% last year. Such tremendous growth can easily attract new investors. But in my view, stock prices should fall sharply in the short term. Let’s see why.
Facedrive stock is tremendously overrated. Currently, it has a market capitalization of over $ 5 billion and annual revenue of less than $ 1 million.
Founded in 2016, Facedrive boasts a position as a “people and planet first” company that provides EVs and hybrids to riders. After volatile revenue growth in the ride-sharing business, the company expanded into multiple businesses such as healthcare, marketplaces and car leasing. Facedrive is currently in the red. In particular, it is interesting to see how management with so many subsegments focuses on the flagship.
Since October 2020, last week’s stock price has skyrocketed from $ 9 to $ 60. Interestingly, the remarkable surge occurred without major progress. The company concludes a private placement contract Presentation Recently piloted an EV subscription service in Toronto.
But the news to justify the rise in stock prices wasn’t quite important. The company has not seen significant growth in performance or finance during this period.
Therefore, the stock price is significantly overvalued and a pullback may be seen. Even if the company doubles its earnings in the next few years, the current stock price is not justified.
Top TSX stocks that are fairly valued to bet this year
A $ 8 billion power sports vehicle manufacturer with offices in more than 120 countries. The company manufactures off-road vehicles, snowmobiles and ships, and holds the top share in many of these categories. Almost 60% of total income comes from the United States. Over the last five years, BRP stocks have returned about 400%, especially above the TSX Composite Index.
BRP stocks witnessed a tremendous weakness last year in a pandemic and closure. However, the latest quarterly earnings announcement showed some promising recovery in demand.
For the third quarter, which ended October 31, 2020, BRP reported adjusted profit growth of 41% year-on-year. Management also provided bright commentary and increased revenue guidance this year. The increase in guidance shows a year-on-year revenue growth of approximately 35% in 2021.
Since the launch of the vaccine last year, BRP inventories have skyrocketed by more than 50%. Despite the rebound, stock prices are relatively undervalued, suggesting room for further growth.
BRP recovery can be delayed due to viral mutations and continuous restriction. Interestingly, however, as consumer discretionary spending increases, there can be a booming demand surge in the post-pandemic world. Once the pandemic is over, BRP’s leading position in the power sports space and leisure travel boom should raise stock prices significantly.
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Stupid contributor Vineeth Kurkarni There are no positions in any of the listed stocks.
Forget Facedrive (TSXV: FD): Consider this decent growth stock instead
https://www.fool.ca/2021/02/22/forget-facedrive-tsxvfd-consider-this-decent-growth-stock-instead/ Forget Facedrive (TSXV: FD): Consider this decent growth stock instead