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REE Automotive (REE)
NASDAQ:REE
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REE Automotive
(NASDAQ:REE)
Rating:37Underperform
Price Target:
$0.50
▼(-23.08%Downside)
Positive Factors
Business Development
REE is continuing business development efforts to sign up other customers beyond the one involved in this announcement.
Financial Performance
The company currently has $61M in cash and should have sufficient runway to navigate the tariff developments with the lowered burn rate.
Revenue Potential
The announcement highlighted that the parties intend to sign a definitive agreement by end of 2025, which could generate up to $770M in potential revenues by 2030.
Negative Factors
Operational Challenges
Management is focusing on cash preservation, cost-cutting efforts, and pausing planned P7 production to better navigate the current environment.
Risk Factors
There are several risks associated with the company, including dilution risk, market adoption risk, technological risk, execution risk, partnership risk, regulatory risk, supply chain risk, competition risk, and uncertainty related to macroeconomic conditions and geopolitical environment.
Tariff Impact
Recent tariff-related developments have negatively impacted the company's plans to bring the P7 offering to the market as previously planned.
REE Automotive (REE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.10M
Dividend YieldN/A
Average Volume (3M)234.17K
Price to Earnings (P/E)―
Beta (1Y)1.67
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees244
SectorConsumer Cyclical
Sector Strength56
IndustryAuto - Recreational Vehicles
Share Statistics
EPS (TTM)N/A
Shares Outstanding28,240,362
10 Day Avg. Volume201,993
30 Day Avg. Volume234,168
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.43
Price to Sales (P/S)0.00
P/FCF Ratio-0.25
Enterprise Value/Market Cap-0.11
Enterprise Value/Revenue-0.64
Enterprise Value/Gross Profit0.50
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$2.00Price Target Upside207.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
REE Automotive Business Overview & Revenue Model
Company DescriptionREE Automotive Ltd. operates in the e-mobility business. The company develops REEcorner technology, which integrates vehicle drive components, including steering, braking, suspension, powertrain, and control into the arch of the wheel. The company also develops REEboard, a flat and modular EV chassis. The company is headquartered in Herzliya, Israel.
How the Company Makes MoneyREE Automotive generates revenue through the sale and licensing of its electric vehicle platforms and related technologies. The company collaborates with automotive manufacturers and fleet operators, providing them with the customizable REEcorner technology to enhance their vehicle offerings. Additionally, REE engages in strategic partnerships and joint ventures to expand its market reach and leverage its technological innovations. Revenue streams also include engineering services and support for integration and customization of its platforms into client-specific vehicle designs.
REE Automotive Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q4-2024)
| % Change Since: -19.75%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Neutral
REE Automotive has achieved significant technological milestones and improved its financial position. However, the company faces substantial challenges due to U.S. tariffs and trade policies, leading to a temporary production pause and doubts about its ability to continue as a going concern. While there are positive developments in software innovation and collaborations, the negative impacts of the macroeconomic environment weigh heavily on the company's outlook.Q4-2024 Updates
Positive Updates
First Federal Motor Vehicle Safety Standard Certification
REE Automotive received the first FMVSS certification for a full-by-wire vehicle in the U.S., marking a significant milestone in the industry.
Successful Collaboration with Airbus
Airbus, in collaboration with REE, completed the first autonomous drive on an active runway using REE's SDV technology.
Launch of REEai Cloud
REE Automotive launched REEai Cloud in collaboration with Geotab, introducing vehicle services and advanced data analytics.
Improved Financial Position
Liquidity improved to $72 million at the end of 2024 due to successful securities offerings, raising approximately $60 million in gross proceeds.
Reduction in Non-GAAP Net Loss
The non-GAAP net loss improved to $70.3 million from $98.3 million in 2023, driven by reductions in engineering, R&D expenses, and operational efficiencies.
Negative Updates
Impact of U.S. Tariffs and Trade Policy
U.S. tariffs and trade policies have significantly impacted REE's supply chain, leading to a temporary production pause.
Production Pause and Cost Reduction Measures
REE has temporarily paused production and plans to significantly reduce costs, including operating expenses and headcount.
Substantial Doubt About Continuance as a Going Concern
Management expressed substantial doubt about REE's ability to continue as a going concern due to macroeconomic conditions and tariff impacts.
Higher Cost of Revenues
Q4 2024 saw an increase in costs of revenues associated with the production of the P7 vehicle, leading to a higher quarterly net loss.
Company Guidance
During the REE Automotive conference call discussing the fourth quarter and full-year 2024 financial results, guidance was provided on several key metrics and strategic changes. The company highlighted a significant increase in demand for their technology, achieving milestones such as the first Federal Motor Vehicle Safety Standard Certification for a full-by-wire vehicle in the U.S. They also launched the REEai Cloud in collaboration with Geotab. However, due to challenges such as U.S. tariffs impacting their supply chain, REE decided to temporarily pause production to focus on cost reduction and accelerate their software business. Financially, they reported a GAAP net loss of $111.8 million for 2024, an improvement from 2023, with a non-GAAP net loss of $70.3 million. Their liquidity was bolstered to $72 million, including an $18 million credit facility, through successful securities offerings. The company plans to prioritize enhancing their capital position and focus on a subscription-based revenue model, with an expected Q1 2025 cash balance of approximately $79.6 million.REE Automotive Financial Statement Overview
Summary
REE Automotive is experiencing significant financial challenges, with declining revenues, negative profit margins, high leverage, and negative cash flows. These factors suggest substantial financial distress and operational inefficiencies.Income Statement
REE Automotive is experiencing significant challenges in its income statement. The company has shown a declining revenue trend from 2020 to 2024, with the latest revenue of $183,000 in 2024 compared to $1,608,000 in 2023. Gross profit margins are negative due to higher costs than revenue, indicating difficulty in managing production or operational costs. The net profit margin is also severely negative, reflecting substantial net losses over the years. EBIT and EBITDA margins are consistently negative, showing continued operational inefficiencies. These factors indicate significant financial distress.15
Very Negative
Balance Sheet
The balance sheet reveals high leverage and declining equity. The debt-to-equity ratio increased from 2023 to 2024 due to rising total debt and decreasing stockholders' equity. Return on equity remains negative, driven by consistent net losses. The equity ratio has decreased significantly, suggesting higher financial risk and reduced financial stability. The company's asset base has shrunk, implying potential challenges in sustaining operations.25
Negative
Cash Flow
Cash flows are under pressure, with negative operating and free cash flows indicating a reliance on external financing. The operating cash flow to net income ratio is unfavorable, suggesting that operating activities are not generating sufficient cash. Free cash flow to net income ratio remains negative, highlighting ongoing cash burn issues. Despite some improvement in financing cash flow, the company struggles to achieve positive cash flow from its core operations.20
Very Negative
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 183.00K | 1.61M | 0.00 | 6.00K | 388.00K |
| Gross Profit | -3.50M | -7.46M | -547.00K | -989.00K | -259.00K |
| EBITDA | -105.58M | -114.09M | -100.76M | -503.56M | -67.93M |
| Net Income | -111.75M | -114.21M | -107.42M | -505.33M | -67.33M |
Balance Sheet | |||||
| Total Assets | 130.28M | 137.90M | 215.01M | 292.94M | 49.01M |
| Cash, Cash Equivalents and Short-Term Investments | 72.26M | 85.63M | 153.62M | 275.77M | 46.37M |
| Total Debt | 50.65M | 38.68M | 21.37M | 0.00 | 0.00 |
| Total Liabilities | 107.15M | 59.83M | 39.60M | 42.53M | 3.23M |
| Stockholders Equity | 23.13M | 78.08M | 175.41M | 250.40M | 45.78M |
Cash Flow | |||||
| Free Cash Flow | -76.52M | -93.02M | -123.64M | -61.55M | -13.66M |
| Operating Cash Flow | -68.98M | -89.27M | -112.58M | -59.14M | -13.06M |
| Investing Cash Flow | 35.97M | 49.62M | -106.83M | -748.00K | -2.26M |
| Financing Cash Flow | 63.55M | 23.97M | 2.43M | 291.30M | 33.12M |
REE Automotive Technical Analysis
Negative
0.65
Price Trends
1.47
Negative
3.30
Negative
5.62
Negative
Market Momentum
-0.22
Negative
33.76
Neutral
69.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For REE, the sentiment is Negative. The current price of 0.65 is below the 20-day moving average (MA) of 0.66, below the 50-day MA of 1.47, and below the 200-day MA of 5.62, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 33.76 is Neutral, neither overbought nor oversold. The STOCH value of 69.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for REE.
REE Automotive Risk Analysis
REE Automotive disclosed 88 risk factors in its most recent earnings report. REE Automotive reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
REE Automotive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | ¥252.06B | 13.21 | 6.57% | 2.79% | 5.06% | -11.45% | |
60 Neutral | $8.57M | 1.35 | 26.62% | ― | 16.65% | ― | |
55 Neutral | $159.13M | ― | -186.28% | ― | 8.52% | 98.75% | |
51 Neutral | $91.53M | ― | 229.13% | ― | 7.02% | 74.19% | |
44 Neutral | $370.32K | ― | ― | ― | ― | ||
43 Neutral | $10.44M | ― | -1026.66% | ― | -24.26% | 93.83% | |
37 Underperform | $20.10M | ― | -220.85% | ― | ― | ― |
* Consumer Cyclical Sector Average
Performance Comparison
REE
REE Automotive
0.68
-3.29
-82.87%
SDOT
Sadot Group
1.39
-2.90
-67.60%
CLEUF
China Liberal Education Holdings
0.13
-2,615.87
-100.00%
GAN
GAN
1.97
0.54
37.76%
NVVE
Nuvve Holding
0.98
-5.37
-84.57%
FFAI
Faraday Future Intelligent Electric
1.63
-14.37
-89.81%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.