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REE Automotive (REE)
NASDAQ:REE
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REE Automotive
(NASDAQ:REE)
Rating:45Neutral
Price Target:―
Positive Factors
Business Development
Management believes the company could begin to monetize the deal in 2025, if closed in a timely manner, with initial revenues coming from software and services sales.
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
Financial Losses
The 3Q24 net loss was negatively impacted by a $14.4M warrant re-measurement charge.
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
$26.33M
Dividend YieldN/A
Average Volume (3M)481.97K
Price to Earnings (P/E)―
Beta (1Y)1.69
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees244
SectorConsumer Cyclical
Sector Strength75
IndustryAuto - Recreational Vehicles
Share Statistics
EPS (TTM)N/A
Shares Outstanding28,240,362
10 Day Avg. Volume1,263,382
30 Day Avg. Volume481,971
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)1.40
Price to Sales (P/S)0.00
P/FCF Ratio-1.48
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.00Price Target Upside135.29% 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 primarily through the sale and licensing of its electric vehicle platforms to automotive manufacturers and fleet operators. The company's revenue model is centered around providing customizable and scalable EV platforms that manufacturers can adapt to create various types of electric vehicles. REE also engages in strategic partnerships and collaborations with industry leaders to co-develop and promote its technology. Additionally, the company may earn income from service agreements and maintenance contracts associated with its platform technologies.
REE Automotive Financial Statement Overview
Summary
REE Automotive faces significant financial challenges, with negative profitability and cash flow issues, despite maintaining a manageable debt level.Income Statement
REE Automotive shows significant challenges in profitability and revenue generation. The gross profit margin and net profit margin are both negative, indicating that the company spends more on production and operations than it earns in revenue. Revenue growth is inconsistent, with significant fluctuations over the years. Despite slightly improved EBIT and EBITDA margins in recent periods, they remain negative, reflecting ongoing operational inefficiencies and losses.25
Negative
Balance Sheet
The balance sheet reflects a moderately leveraged position with a manageable debt-to-equity ratio, as total debt is relatively low compared to stockholders' equity. However, the declining equity ratio indicates a weakening financial structure, with liabilities growing faster than equity. The return on equity is negative due to consistent net losses, which is a concern for shareholders.40
Negative
Cash Flow
REE Automotive's cash flow situation is challenging, with a persistent negative free cash flow and operating cash flow. The operating cash flow to net income ratio suggests that cash outflows from operations exceed net income, indicating operational inefficiencies. However, the company has managed to secure substantial financing, providing some liquidity to support ongoing operations.30
Negative
| Breakdown | ||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 626.00K | 1.61M | 0.00 | 6.00K | 388.00K | Gross Profit |
| -4.45M | -7.46M | -547.00K | -989.00K | -259.00K | EBIT |
| -94.51M | -119.89M | -127.97M | -515.50M | -68.10M | EBITDA |
| -85.96M | -114.09M | -100.76M | -503.56M | -67.93M | Net Income Common Stockholders |
| -109.69M | -114.21M | -107.42M | -505.33M | -67.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 77.49M | 85.63M | 153.62M | 275.77M | 46.37M | Total Assets |
| 130.24M | 137.90M | 215.01M | 292.94M | 49.01M | Total Debt |
| 38.66M | 38.68M | 21.37M | 0.00 | 0.00 | Net Debt |
| -14.95M | -2.56M | -35.39M | -275.77M | -44.71M | Total Liabilities |
| 59.90M | 59.83M | 39.60M | 42.53M | 3.23M | Stockholders Equity |
| 70.34M | 78.08M | 175.41M | 250.40M | 45.78M |
| Cash Flow | Free Cash Flow | |||
| -80.81M | -93.02M | -123.64M | -61.55M | -13.66M | Operating Cash Flow |
| -77.59M | -89.27M | -112.58M | -59.14M | -13.06M | Investing Cash Flow |
| 46.99M | 49.62M | -106.83M | -748.00K | -2.26M | Financing Cash Flow |
| 84.13M | 23.97M | 2.43M | 291.30M | 33.12M |
REE Automotive Technical Analysis
Negative
0.85
Price Trends
2.83
Negative
5.42
Negative
5.97
Negative
Market Momentum
-0.65
Positive
25.54
Positive
3.06
Positive
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 0.85 is below the 20-day moving average (MA) of 2.22, below the 50-day MA of 2.83, and below the 200-day MA of 5.97, indicating a bearish trend. The MACD of -0.65 indicates Positive momentum. The RSI at 25.54 is Positive, neither overbought nor oversold. The STOCH value of 3.06 is Positive, 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 3 New Risks
1.
Our significant shareholders have influence and may be able to exert substantial influence over REE, including over decisions that require the approval of shareholders, and their interests may conflict with the interests of other shareholders, which could materially adversely impact REE as a public company and our shareholders' investment in our company. Q4, 2024
2.
The market price of REE's Class A Ordinary Shares has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control. Q4, 2024
3.
We operate in an industry that is new and rapidly evolving, and our estimates are subject to significant uncertainty. Q4, 2024
REE Automotive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $6.84B | 11.23 | 3.09% | 3.95% | 2.66% | -25.23% | |
58 Neutral | $7.70M | 1.21 | 26.62% | ― | 16.65% | ― | |
50 Neutral | $116.17M | ― | -186.28% | ― | 8.52% | 98.75% | |
46 Neutral | $91.53M | ― | 229.13% | ― | 7.02% | 74.19% | |
45 Neutral | $26.33M | ― | -220.85% | ― | ― | ― | |
45 Neutral | $3.39M | ― | -1026.66% | ― | -24.26% | -425.82% | |
44 Neutral | $4.61M | ― | -7.45% | ― | ― | ― |
* Consumer Cyclical Sector Average
Performance Comparison
REE
REE Automotive
0.85
-4.03
-82.58%
SDOT
Sadot Group
1.24
-1.93
-60.88%
CLEU
China Liberal Education Holdings
1.37
-1,294.75
-99.89%
GAN
GAN
1.97
0.60
43.80%
NVVE
Nuvve Holding
0.92
-5.58
-85.85%
FFAI
Faraday Future Intelligent Electric
1.19
-45.61
-97.46%
REE Automotive Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q4-2024)
| % Change Since: 4.94%|
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.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.