Mullen Automotive, Inc. (MULN) distributes and sells electric vehicles (EVs). The company also operates CarHub, a digital platform that leverages artificial intelligence to offer an interactive solution for buying, selling, and owning a car.
MULN shareholders are expected to vote on a reverse stock-split decision soon in a range between 1-for-2 and 1-for-25. Nasdaq issued a deadline for MULN of March 6 to achieve a trading price of $1. However, the company will likely be eligible to file a 180-day extension.
However, if the company fails to satisfy the $1 minimum price restriction during the second compliance period, it could result in the stock’s delisting from the exchange.
The stock has declined 95.6% year-to-date and 37.8% over the past three months to close its last trading session at $0.23. While MULN has gained 2.7% intraday, it is still trading below its 50-day and 200-day Moving averages of $0.29 and $0.98, respectively.
Here are the factors that could affect MULN’s performance in the upcoming months:
Recent Acquisitions
On November 30, MULN announced the closing of its acquisition of Electric Last Mile Solutions' (ELMS) assets in an all-cash purchase valued at $105 million. This is expected to enhance the company’s manufacturing capacity. Earlier in September, the company announced the acquisition of a controlling interest in EV truck innovator Bollinger Motors, kickstarting its EV acquisition phase.
Bleak Financials
For the fiscal quarter that ended June 30, MULN’s loss from operations came in at $18.22 million, widening 184.5% year-over-year. Its net loss increased 289.9% from the prior-year quarter to $59.47 million. Its net loss per share came in at $0.16.
Poor Profitability
MULN’s trailing-12-month ROTC of a negative 618.14% compares to the industry average of 6.59%. Its trailing-12-month ROTA of a negative 169.94% compares to the industry average of 4.45%.
POWR Ratings Reflect Bleak Prospects
MULN’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. MULN has a Value grade of F, in sync with the stock’s trailing-12-month Price/Book multiple of 5.80, which is 198.4% higher than the industry average of 1.94.
The stock also has a D grade for Quality, consistent with its poor profitability.
In the 64-stock Auto & Vehicle Manufacturers industry, it is ranked #57. The industry is rated D.
Click here to see the additional POWR Ratings for MULN (Growth, Momentum, Stability, and Sentiment).
View all the top stocks in the Auto & Vehicle Manufacturers industry here.
Bottom Line
Risks of the stock’s potential delisting might make investors anxious. Moreover, its bleak bottom-line performance is concerning. Also, the stock is trading below its moving averages, signaling a downtrend. Hence, it might be best avoided now.
How Does Mullen Automotive, Inc. (MULN) Stack up Against Its Peers?
While MULN has an overall POWR Rating of F, one might consider looking at its industry peers, Isuzu Motors Limited (ISUZY) and Suzuki Motor Corporation (SZKMY), which have an overall A (Strong Buy) rating, and PACCAR Inc (PCAR) and Hyundai Motor Company (HYMTF), which have an overall B (Buy) rating.
MULN shares were trading at $0.23 per share on Friday afternoon, down $0.00 (+1.14%). Year-to-date, MULN has declined -95.60%, versus a -18.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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