Proterra Share Forecast January 2022 – Time to Buy PTRA?

Shares of American automotive and energy storage company (NASDAQ: PTRA) are in the green today after closing at $9.34 as of January 10^th (19:59 EST). EV companies have always been a welcome addition to any investor’s portfolio. One such company is Proterra, which has delivered more than 700 electric buses so far.

Proterra – Technical Analysis

Proterra’s financial statement indicates a market cap of $2.039 billion and total assets worth $986.069 million. Being a new company in the market, Proterra generated $59 million in revenue and a gross margin of 2% in the second quarter of 2021.

Oscillators such as Relative Strength Index (14)(48.66),  Stochastic %K (14, 3, 3)(70.37), Commodity Channel Index (20)(106.01),  Average Directional Index (14)(12.68) and Awesome Oscillator(−0.54 ) are neutral.  Moving averages such as Exponential Moving Average (10)(9.13),  Simple Moving Average (10)(9.07),  Exponential Moving Average (20)(9.27) and Simple Moving Average (20)(9.03) are indicating a buy action.

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Recent Developments

California-based Proterra merged with special purpose acquisition company (SPAC) ArcLight Clean Transition Corp., before going public in June 2021. The company is a provider of battery systems to commercial-vehicle original-equipment manufacturers (OEMs), including makers of delivery trucks, buses, and other commercial vehicles. Proterra also sells electric buses in the United States as an OEM and has sold 700 buses so far. Other services include providing fleet-scale charging solutions and software services.

Proterra currently has a battery-production facility in Burlingame, California, a bus-manufacturing facility in Greenville, South Carolina as well as both kinds of facilities in City of Industry, California. Last December, the company announced a $76 million investment for a new battery factory in South Carolina which is expected to become operational in the second half of 2022. The company delivered 154 buses, up from 122 delivered in the year-ago period and also delivered battery systems for 134 vehicles, up from systems for 74 vehicles delivered in the first nine months of 2020.

Electric buses and other commercial vehicles are at the heart of global emission reduction objectives. The bipartisan infrastructure law introduced by the Biden administration provides a $5 billion investment for low- or zero-emission buses.  This also means that Bus fleets in the state of California and in New York City, Chicago, and Seattle will be required to convert to zero missions by 2040. As a result, Proterra estimates that there are more than 25,000 such buses in operation currently, which presents a significant market opportunity for the company.

Should You Buy PTRA Shares?

Investors interested in Proterra should consider the challenge that comes from the various big players operating in the commercial-EV space. Proterra is a direct competitor of NFI Group, Gillig Corporation, Nova Bus Company,  and BYD in the electric-bus segment. Most notably BYD has delivered more than 50000 electric buses worldwide.

In the battery segment, Proterra competes with the likes of CATL, as well as newer companies such as Romeo Power and BorgWarner. It is also competing with auto-parts suppliers, such as Cummins, Allison Transmission, and Dana, which are also developing electric drivetrains. This paints a picture of the global EV market being very competitive.

Investors must realise that the shares may not return to the price levels seen at the start of the previous year as it mostly came from a broader euphoria for EV stocks than from Proterra’s business fundamentals. Proterra might not experience the kind of growth that normal EV investors expect. Considering this, Proterra is a long-term growth story, but suitable only for patient investors.

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