Niu Technologies (NIU) and Arcimoto Inc. (FUV) are two of the world’s fast-growing companies in the electric vehicle (EV) space. Based in China, smart e-scooter company NIU’s products consist of three series — N, M and U, — with multiple models or specifications for each.
FUV is based in Eugene, Oregon and is engaged in the designing, developing and manufacturing of three-wheeled electric vehicles. Its products include Fun Utility Vehicle (FUV), Rapid Responder and Deliverator.
With a shift to EVs gaining pace worldwide, we think the demand for NIU and FUV’s products should keep growing because both companies operate in niche markets with lesser competition.
While NIU has returned 388% over the past year, FUV has gained 908.6%. In terms of the past month’s performance, NIU is a clear winner with 49% returns versus FUV’s 20.2%. But which of these two stocks is a better pick now? Let’s find out.
NIU provided its e-scooter sales volume results for the fourth quarter 2020, on January 7. The number of e-scooters sold in the China market increased 35% year-over-year to 137,586, and the number of e-scooters sold in the international markets increased 179.6% year-over-year to 12,119. Also on January 7, the company launched two new scooters — the NQi GT and the MQi+, which designed for the European market.
In early December, NIU opened its very first Scottish flagship store in Edinburgh. The store was opened in partnership with Flex Electric and Sinnis Motorcycles as a collaborative project following NIU’s growth within the U.K. market. The company also opened its very own flagship store in Bristol U.K. and in Porto, Portugal in October, last year.
FUV announced last week that it has joined the Zero Emission Transportation Association (ZETA), a national coalition of more than 40 businesses that are advocating for 100% electric vehicle sales by 2030. On January 6, the company announced that it has agreed to purchase a 185,000 square foot manufacturing site in Eugene, Oregon, which is expected to be instrumental in achieving mass production of its ultra-efficient EVs.
As the next step in its nationwide expansion plan, FUV has begun sales in the state of Florida. Florida FUV deliveries are expected to begin in the first quarter of 2021, and first Roadster deliveries are expected to begin later in the year. On December 2, FUV announced that it had launched nationwide roadside assistance for every company vehicle through Agero, the leading driver assistance services partner for automotive manufacturers and insurance carriers in North America.
Recent Financial Results
NIU’s revenue surged 36.7% year-over-year to $131.74 million for the third quarter ended September 30, 2020, driven primarily by higher sales volume of e-scooter sales.
NIU’s e-scooters sold increased 67.9% year-over-year to 250,889, driven primarily by sales growth in China, which increased 70.2% year-over-year to 245,293. The number of e-scooters sold in the international markets increased 6.3% year-over-year. Its net income increased 20.5% year-over-year to $11.78 million, yielding EPS of $0.18, which has increased 38.5% sequentially.
FUV’s revenue for the third quarter ended September 30, 2020 increased 1953.1% year-over-year to $683,895. It was primarily driven by the resumption of vehicle production and customer deliveries, including 31 vehicles delivered in September alone. From the start of production in September 2019, to September 30, 2020, the Company had produced 136 production vehicles, up from the 57 produced by December 31, 2019.
Expected Financial Performance
Analysts expect NIU’s revenue to increase 25.2% for the quarter ended December 31, 2020, 137.5% for the quarter ending March 31, 2021 and 75.1% in 2021. The company’s EPS is expected to grow 250% for the quarter ending March 31, 2021 and 117.9% in 2021.
The market expects FUV’s revenue to increase 54.7% for the quarter ended December 31, 2020, 378.1% for the quarter ending March 31, 2021, and 613.6% in 2021. The company’s EPS is expected to grow 20% for the quarter ending March 31, 2021, and 18.2% in 2021.
NIU’s trailing-12-month revenue of $339.97 million is higher than FUV’s $2.51 million. Moreover, NIU is more profitable, with a gross margin of 23% versus FUV’s negative value.
Also, NIU’s ROE and ROA of 20.6% and 5.7%, respectively, compare favorably with FUV’s negative values.
In terms of trailing-12-month P/S, FUV is currently trading at 166.84x, which is significantly more expensive than NIU, which is currently trading at 9.81x. Moreover, FUV is more expensive in terms of trailing-12-month EV/S (201.69x versus 9.28x).
So, NIU is also the more affordable stock here.
While NIU is rated “Strong Buy” in our proprietary POWR Ratings system, FUV is rated “Buy.” Here are how the four components of overall POWR Rating are graded for NIU and FUV:
NIU has an “A” for Trade Grade, Peer Grade, and Industry Rank, and a “B” for Buy & Hold Grade. It is currently ranked #19 of 52 stocks in the Technology – Hardware industry.
FUV holds an “A” for Trade Grade and Industry Rank, a “B” for Buy & Hold Grade, a “C” for Peer Grade. It is currently ranked #27 of 52 stocks in the Auto & Vehicle Manufacturers industry.
Both NIU and FUV are good investment bets considering their innovative product offerings, market dominance, and continued expansion. However, NIU appears to be a better buy based on its higher earnings growth potential, and relatively lower valuation.
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NIU shares were trading at $45.90 per share on Thursday afternoon, up $2.27 (+5.20%). Year-to-date, NIU has gained 63.64%, versus a 2.76% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More…
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