Fisker Inc.

Fisker Inc. (NYSE: FSR) operates within the automobile segment and provides electric vehicles and advanced mobility solutions.

Key Highlights:

• Collaboration with Mekonomen Group: Recently, the company collaborated with Mekonomen Group, wherein the later would provide after-sales services for Fisker customers in Denmark, Norway and Sweden. The above agreement is in relation to the deliveries of the Fisker Ocean SUV, which are expected to come out in Q4FY22. 

• Order for first all-electric vehicle: On May 21, 2021, the company confirmed that it would start manufacturing its first all-electric vehicle for the Holy See, Pope Francis, after a historic visit to Vatican City. The above vehicle is expected to deliver an exhaust-free and emissions-free experience for the consumers. 

• Delivery of 700 Vehicles: Earlier, on May 18, 2021, the company received an order from Onto, a UK-based electric car subscription provider which caters to private and business users, wherein the former would deliver up to 700 electric vehicles in 2023. 

Q1FY21 Financial Highlights:

• FSR announces its quarterly result, wherein the company posted revenue of USD 0.022 million.
• Operating costs and expense stood significantly higher at USD 33.103 million, as compared to USD 0.800 million in Q1FY20. The surge in expense was primarily attributable to higher general and administrative costs (USD 5.832 million v/s USD 0.432 million in pcp), coupled with a surge in research & development expense (USD 27.271 million v/s USD 0.368 million in pcp).
• Loss from operations widened to USD 33.098 million v/s USD 0.800 million in Q1FY20.
• Net loss increased to USD 176.843 million, from USD 1.125 million in pcp, due to above-mentioned factors coupled with higher loss from change in fair value of derivatives USD 145.249 million v/s USD 0.106 million in pcp.

Q1FY21 Income Statement Highlights (Source: Company Report)

Risks: The company is yet to report stable revenue from its operations. Any delay is the project execution timeline or cancellation of order would affect the group’s performance.

Stock Recommendation:

The company operates within the electric vehicle segment, and the long-term prospect of the industry remains bright owing to the lower carbon-emission norms adopted by the developed nations. Moreover, the company bagged few new orders from reputed clients in the recent past and expected to start production from FY22. However, the group is battling with higher input costs, which might dampen the company’s profitability. The stock of FSR corrected ~52% and ~26% in the last three months and six months, respectively. On the valuation front, the stock is trading at a forward EV to Sales multiple of 26.7x, which is significantly higher compared to the industry (Automobiles & Auto Parts) median multiple of 1.0x. Hence, considering the aforesaid facts, we recommend an ‘Avoid’ rating on the stock at the closing price of USD 13.40 on June 01, 2021.

One-Year Technical Price Chart (as on June 01, 2021). Analysis by Kalkine Group

Triterras Inc

Triterras Inc (NASDAQ: TRIT) is a fintech company focusing on trade and trade finance. Its technology platform facilitates commodities trading that connects and enables commodity traders to trade and source capital from lenders directly online. Also, the company focuses on credit insurance and logistics solutions for small and medium-sized enterprises using innovative blockchain-enabled technology.

Key highlights

• Focused on Strategic partnerships: Recently, the firm inked a letter of intent to form a strategic collaboration and acquire a minority investment with Singapore-based Electronic Cash and Payment Solutions (S) Pte Ltd. (“ECAPS”), which has a substantial presence in India. The corporation would invest USD 4 million under the terms of “LOI”. We believe, this deal would establish its footprint in the Indian MSME sector. The Indian MSME sector has a USD 300 billion+ financing opportunity, and ECAPS now tracks over USD 50 million in monthly gross transaction value over 1.8 million transactions on average, indicating a significant opportunity.

• Riding on acquisitions: Invoice Bazaar, an established supplier of supply chain finance services and e-commerce financing in the Gulf Cooperation Council countries, was recently purchased by the firm. Over the following two years, the company would pay up to USD 8 million to Invoice Bazaar stockholders. The organization now has an amazing workforce in the strategically crucial Middle East area, with licenses to operate immediately, which is a significant plus. Furthermore, the acquisition would add to the company's Kratos platform and serve as a model for expansion into other markets.

• Financial Estimates: The company expects sales of roughly USD 17 million in the third quarter of FY20, with a net income of roughly USD 10 million. On Y-T-D basis the firm predicts a top line of USD 40.7 million for the current fiscal year, with a bottom line of USD 24.2 million. Furthermore, according to management estimates, revenue for FY20 would be in the region of USD 56.6 million, while net income will be about USD 32.9 million.

Source: Company 

Financial Highlights for the six-months ended 31 Aug 2020:

• Profit for the period stood significantly higher at USD 14.208 million, as compared to USD 0.510 million for six month ended FY 2019.
• Income tax expense for the period reported at USD 3.017 million v/s 0.104 million for the pcp.
• EBITDA for the six months FY 2020 increased at USD 17.909 million v/s USD 0.615 million for the six months ended FY 2019.

Source: Company Report

Risks associated with investment

The company’s operations are in a nascent stage, and the continuity of the business depends on the consumer preference to choose the platform for commodity trading and other trades.

Stock Recommendation:

The stock of TRIT corrected ~15.5% and ~49.6% in the last one month and six months, respectively. The company operates through its Kratos online trading platform and has provided estimates for future financials. In the meanwhile, the firm has failed to publish financial accounts for the aforementioned time periods. Due to a lack of financials, we are unable to examine the company's health. On the valuations front the stock of TRIT is trading at a forward of EV to Sales multiple of 4.5x, as compared to the industry (Financials) median of 3.4x. Hence, considering the above rational, we prefer to remain on the sidelines and give an ‘Avoid’ rating on the stock of TRIT at the closing price of USD 6.20 on June 01, 2021.

One-Year Technical Price Chart (as on June 01, 2021). Analysis by Kalkine Group

*The reference data in this report has been partly sourced from REFINITIV.