Arrival Share Price Forecast December 2021 – Time to Buy ARVL?

Shares of British electric vehicle manufacturer  Arrival (NASDAQ: ARVL) are in the red, closing at $7.38 as of December 16^th (22:50 EST). The automaker issued a disappointing earnings report that also warned there would be further delays for its eventual EV launch. It also made a disappointing announcement that would be diluting shareholders with a secondary stock offering of 25 million shares (with a total of as much as 28.7 million if the underwriters want in). This move was done to raise around $330 million in cash as well as issue convertible notes worth an additional $200 million for Arrival.

Arrival – Technical Analysis

According to the financial statement released by Arrival, it has a total market cap of $4.937 billion with total assets worth $1.204 billion.

Moving averages for Arrival such as Exponential Moving Average (10)(7.86),  Simple Moving Average (10)(7.66), Exponential Moving Average (20)(8.94), Simple Moving Average (20)(8.57) and  Exponential Moving Average (30)(9.88) are indicating a sell action. Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(50.01), Williams Percent Range (14)( −83.50), Bull Bear Power(−1.05 ) and Ultimate Oscillator (7, 14, 28)(37.15) are neutral.

68% of all retail investor accounts lose money when trading CFDs with this provider.

 

Recent Developments

Arrival initially debuted in the market with a lot of promise but it now feels as if investors should have taken a good look before going all in. The company promised that its micro-factories would allow it to quickly establish production at lower cost, while more efficiently scaling up to meet local market needs. But it has failed in this respect. Arrival thus made changes to its microfactory rollout schedule and expects lower vehicle volumes and revenues for the next year. The company’s future growth depends on how many micro-factories it can establish.

Since its inception, Arrival has created strategic partnerships with many potential clients and other automakers. This includes one with Hyundai that allows it access to Hyundai’s engineering expertise and supply chain. It has also partnered with logistics operator United Parcel Service where UPS has agreed to purchase 10,000 vans from Arrival between 2021 to 2025, with an option to purchase an additional 10,000 vans. This could result in a revenue stream of $1.2 billion for Arrival.

Arrival has previously acquired a new factory in Bicester with plans to start production in 2022 back in March last year. It debuted on NASDAQ by merging with special-purpose acquisition company CIIG Merger Corp in late May 2021. It also announced that it would start building electric cars for Uber ride-hailing drivers, with production expected in Q3 of 2023.

Arrival now expects to generate revenue of $14.1 billion in 2024 with a gross profit of $3.8 billion. By 2022, they have forecasted $1 billion in sales. Arrival has postponed the start of production of their first vehicles from the fourth quarter of this year to the second quarter of next year, which may impact sales and profits estimates.

Should You Buy ARVL Shares?

Investors interested in ARVL shares should consider some risks. No one knows exactly how the new vehicles will perform in real-world conditions and whether customers will like them. It has yet to establish a niche in the competitive EV market. The company faces increasing competition from other automakers as well as startups. The shares could be sent plunging if the company fails to deliver next year. Based on all of the above, investors should rather stay away from ARVL shares for the time being.

Buy ARVL Stock at eToro from just $50 Now!