Stocks’ Details

GreenPower Motor Company Inc.

GreenPower Adds ABC Bus in NY Market: GreenPower Motor Company Inc. (NASDAQ: GP) designs, builds and distributes transit buses, school buses, shuttles, cargo van, and a double-decker. As on 3 November 2020, the market capitalization of the company stood at ~$169.85 million. The company has recently announced a formal dealership agreement with ABC Bus, Inc. in the State of New York, wherein ABC will purchase 100 vehicles over the next 36 months including the purchase of two EV Stars within thirty days. The company will begin initial deliveries this year and will accelerate the further deliveries in 2021.

Quarterly Performance (For the Period Ended 30 June 2020): During the fiscal first quarter ended June 30, 2020, the company reached numerous key milestones and reported revenue of $2.27 million and generated a gross profit of $618.6k (27.2% of revenue). In the same time span, the company delivered 18 EV Stars to Green Commuter and received an order for two EV Stars from UCLA.

Q1FY21 Results (Source: Company Reports)

Stock Recommendation: The company has received an order for 10 all-electric B.E.A.S.T. school buses and can address a variety of lucrative markets that demonstrate high demand. The company is likely to release its earnings for the quarter ended 30 September 2020 on 12 November 2020. As per NASDAQ, the stock of GP is trading close to its 52-weeks’ low of $8.22, proffering a decent opportunity for the investors to enter the market. The stock of GP gave a return of 49.11% in the past three months but a negative return of 24.53% in the last one month. On a technical front, the stock of GP has a support level of ~$8.29 and a resistance level of ~$12.87. Considering the current trading levels, decent returns in the past three months, and formal dealership agreement with ABC Bus, Inc., we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $9.29, down by 0.75% on 3 November 2020.

Nano Dimension Ltd.

Closes $50 Million Registered Direct Offering: Nano Dimension Ltd. (NASDAQ: NNDM) is a provider of intelligent machines for the fabrication of Additively Manufactured Electronics. As on 3 November 2020, the market capitalization of the company stood at ~$164.60 million. The company has recently closed a registered direct offering of 16,722,000 ADS at $3.00 per ADS and received gross proceeds of ~$50 million. The Company will use the net proceeds for working capital and for other general corporate purposes.

Quarterly Performance (For the Period Ended 30 June 2020): During the second quarter ended June 30, 2020, the company reported a decline in revenue to $288k from $702k in the first quarter of 2020. This was mainly due to delays in identified transactions of DragonFly systems. In the same time span, the company reported an increase in net loss to $8.26 million from $2.07 million in the first quarter of 2020. At the end of the quarter, the company had a cash and deposit balance of $49.52 million.

Quarterly Highlights (Source: Company Reports)

Stock Recommendation: The company has witnessed a material impact on its financial performance due to COVID-19 but expects to be better positioned once the dust settles. The company will release its financial results for the third quarter of 2020 on November 12, 2020. As per NASDAQ, the stock of NNDM is trading near the average 52-weeks’ levels. The stock of NNDM gave a return of 17.96% in the past three months and a return of 27.96% in the last one month. On a technical front, the stock of NNDM has a support level of ~$1.73 and a resistance level of ~$4.89. Considering the current trading levels, volatile market conditions, fall in revenues, and key investment risks, we suggest investors to keep an eye on the business activities and give an ‘Avoid’ rating on the stock at the closing price of $3.02, up by 2.37% on 3 November 2020.

Amdocs Limited

AIA Thailand Partners with Amdocs: Amdocs Limited (NASDAQ: DOX) is a multinational corporation that specializes in software and services for communications, media and financial services providers and digital enterprises. As on 3 November 2020, the market capitalization of the company stood at ~$7.58 billion. The company has recently signed an agreement to implement the Amdocs DataONE privacy solution, which will enable users to have access control within application and database. Under the terms of the agreement, Amdocs DataONE will work with the SecuPi data-protection platform to execute the privacy solution for AIA Thailand.

Quarterly Performance (For the Period Ended 30 June 2020): During the third quarter ended June 30, 2020, the company reported revenue of $1.03 billion, exceeding its midpoint of the guidance range of $990-$1,040 million. In the same time span, the company reported GAAP diluted EPS of $0.90 and GAAP operating income of $148 million. The company also reported free cash flow of $146 million and reported a cash balance of $1,194 million (inclusive of aggregate borrowings of $750 million).

Quarterly Financial Performance (Source: Company Reports)

Guidance: The company has provided guidance range for the fourth quarter and expects revenue in the range of $1,015-$1,055 million and GAAP diluted EPS between $0.95-$1.03. For the full year 2020, the company is likely to report a growth of 1.1% - 2.1% in revenue and expects free cash flow of ~$420 million.

Valuation Methodology: Price to Earnings Multiple Based Relative Valuation (Illustrative)

Price to Earnings Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The company delivered decent live deployments, maintained stable profitability, and generated robust free cash flow. It is also expecting a pipeline of opportunities in the coming years and can sustain future long-term growth. As per NASDAQ, the stock of DOX is inclined towards its 52-weeks’ low levels of $44.05. The stock price of DOX corrected by 8.13% in the last three months and witnessed a price correction of 0.85% in past one month. On a technical front, the stock of DOX has an immediate support level of ~$54 and a resistance level of ~$63. We have valued the stock using the price to earnings multiple based illustrative relative valuation and have arrived at a target price offering an upside of lower double-digit (in % terms). Considering the current trading levels, guidance for fourth quarter, partnership with AIA Thailand and decent financial performance, we recommend a ‘Buy’ rating on the stock at the closing price of $57, down by 0.4% on 3 November 2020.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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