Left-wing EV Plays to Consider

Shares of electric vehicle (EV) manufacturer VinFast Auto (NASDAQ:VFS) may be out of the left field for U.S.-based investors, especially since the company is from Vietnam. However, since it is publicly traded and the stock price has now fallen, US stock traders should take a closer look at VinFast.

VinFast manufactures electric cars, trucks and electric bicycles, which could be a strong sales force in densely populated areas. The EV sector is currently very crowded, so VinFast needs to stand out to remain competitive.

As you will see, VinFast definitely stands out. At the same time, stock traders are still unconvinced by VinFast’s growth prospects. Nonetheless, data shows the unusual EV maker is making progress so far in 2024.

VinFast wants you to “Drive Your Style”.

Before looking into VinFast’s operating and financial results, prospective investors must first understand that VinFast is no different just because the company is located in Vietnam. In fact, VinFast’s bold and unconventional spirit is the driving force that will drive the company’s future growth and success.

Here’s an example of what I’m talking about. VinFast launched the DrgnFly model electric bike earlier this year with the slogan “Drive your style”. DrgnFly’s design “stands out for its elongated, V-shaped frame that evokes the image of a flying dragon.” At the same time, the bike also features “wide handlebars, balloon tires, and an ergonomic riding position.”

Rolling down the streets on your DrgnFly electric bike is sure to get a lot of attention. Another VinFast product that lets you “drive your style” is the VF Wild electric pickup truck, which doesn’t look as “wild” as its name suggests. However, the vehicle has a “bed length designed to extend from 5 feet to 8 feet,” allowing “the VF Wild to be equipped with the largest bed in the segment.”

Next up is the VinFast VF-3 electric mini SUV. It’s small and adorable, making it ideal for densely populated areas. At the same time, the VF-3 is surprisingly practical, with “estimated range targets of over 125 miles per full charge.”

In other words, investing in VinFast is not simply betting on the Vietnamese EV manufacturer. We are also confident that these unusual vehicle concepts will become popular and that the “wow” factor will enhance VinFast’s top and bottom lines in the long run.

VinFast stock plunges despite accelerating profits

As for VinFast’s sales and earnings, the automaker just announced its operating and financial results for the first quarter of 2024. We might assume the results were poor, as VinFast stock price plummeted 10% within the first hour of today’s trading session.

However, looking at the results, we found nothing particularly dissatisfying. First of all, VinFast’s EV deliveries in the first quarter of 2024 were 9,689 units, up 444% year-on-year. Additionally, the company’s revenue increased 270% year over year to $303 million. Among other things, VinFast’s net income loss improved from 30 cents per share in the fourth quarter of 2023 to 26 cents per share in the first quarter of 2024.

Here’s the problem. At least there is a possibility that it could be the driving force behind today’s stock market crash. Wall Street analysts had expected VinFast to report a net loss of 22 cents per share on revenue of $429 million. Therefore, the market did not appreciate VinFast’s improvements as the company did not live up to analysts’ consensus forecasts.

On the other hand, only four analysts on Wall Street currently cover VinFast. This makes the idea of ​​revenue success and failure less clear and, ultimately, less useful to investors.

Another notable thing is that earlier this year, VinFast set a goal of delivering 100,000 vehicles in 2024. This despite VinFast delivering a total of 34,763 vehicles in 2023.

The company now expects to deliver 100,000 vehicles this year as well. This is no easy task, considering that VinFast only delivered 9,689 units in the first quarter of 2024.

This is the point where management-level confidence is likely to outpace actual performance. Still, the immediate 10% drop in VinFast’s stock price seems excessive. VinFast has not followed Wall Street’s standards, but those standards may not be meaningful or feasible at this time. So, if you’re enjoying VinFast’s eye-catching vehicle concept and undeniable sales acceleration, you may want to consider the VFS inventory position, which, like the VF-3 mini SUV, is small but ready to haul.

disclaimer: All investments involve risk. Under no circumstances should this article be taken as investment advice or constitute liability for investment profits or losses. The information in this report should not be relied upon for investment decisions. All investors should conduct their own due diligence and consult their own investment advisors when making trading decisions.