Zapp Electric Vehicles (ZAPP) has seen a spectacular share surge with a whopping 362% following a promising earnings report and news of approval of its electric vehicles (EV) in the United Kingdom. The company has revised its future guidance, anticipating its first i300 customer deliveries by the fourth quarter of 2024 and an expected sales target of over 5,000 units in fiscal 2025. The upward trend of ZAPP’s growth makes it a stock with breakout potential in the EV space.
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ZAPP’s i300 Ready to Hit the Road
Zapp Electric Vehicles Group is a British electric motorcycle manufacturer, and is set to transform the electric two-wheeler segment with its high-performance urban electric two-wheeler. The i300 model has been recognized as a winner of the iF DESIGN AWARD 2024, among other notable accolades. The company offers a direct-to-customer experience where bikes are ordered online and delivered straight to the customer’s home by authorized personnel who provide inspection, service, and support.
The i300 has recently obtained motorcycle single-vehicle approval from the UK Driver and Vehicle Standards Agency, allowing it to be used on public roads. Consequently, the company is set to commence initial deliveries in August 2024 with plans for a wider commercial rollout in Europe and Asia.
The company is also expanding its operations with a new standby equity purchase agreement with Yorkville Advisors Global. It provides additional funds to facilitate expansion to other countries and initiate the commercial rollout of the i300 in India.
The company’s stock has seen significant growth following its increased financial resources. After securing a commitment for up to $50 million, Zapp has access to a larger pool of funds, replacing the original $10 million agreement made in February 2024.
Zapp’s Recent Financial Results & Outlook
During the six months ended March 31, 2024, the company reported a net loss of $5.0 million, a significant improvement from the $8.6 million loss in the same period in 2023. A contributing factor to the net loss is a non-cash charge of $2.0 million, stemming from the revaluation and termination of financial instruments linked to the 2023 business amalgamation. The company’s operating loss decreased from $3.9 million in the same period in 2023 to $3.1 million.
Looking ahead, management has raised the company’s business outlook. It anticipates the first customer deliveries of i300 in the fiscal fourth quarter of 2024 and expects to sell beyond 5,000 units in the fiscal year ending September 30, 2025. Sales in fiscal 2025 are forecasted to tilt towards the second half of the year, reflecting a projected run-rate of over 25,000 units annually to the onset of the 2026 fiscal year.
What Is the Price Target for ZAPP Stock?
The stock has been volatile, sporting a beta of 1.88. At one point, shares traded above $200 in meme stock territory. However, reality set in, and the stock cascaded down to $0.70 until positive news catalyzed the shares to their recent rally. Despite the dramatic run-up in price, shares still trade at the lower end of their 52-week price range of $0.70 – $40.00 and show positive price momentum, trading above the 20-day (5.76) and 50-day (3.91) moving averages.
Wall Street follows the company thinly, though Litchfield Hills Research analyst Theodore O’Neill recently initiated coverage with a Buy rating and a price target on ZAPP stock of $35.00, representing a potential upside of 155.85% from current levels.
Final Thoughts on ZAPP
After the recent approval of its i300 electric vehicle (EV) in the UK, Zapp Electric Vehicles’ is poised for significant growth. The stock has recently rallied and is predicted to continue this upward trend, making ZAPP a potentially attractive high-growth opportunity in the rapidly evolving EV market.
