Sign InMULN: Fundamental and Technical Analysis Signal Risk, Stock Recommended as 'Sell'
Summary
As of the analysis date, Mullen Automotive Inc. (MULN) is performing poorly in terms of profitability with a high negative earnings per share, and its recent negative news and bearish technical indicators suggest that it is a risky investment and is recommended as a 'Sell' at this time, although long-term investors should monitor the company for signs of profitability and stability in the EV industry.
Fundamental Analysis
Mullen Automotive, Inc. (MULN) currently trades at $0.46 with a market cap of $82.88 million on the NASDAQ exchange. While the company has a considerable number of shares outstanding at 184.17 million, the company has reported a very high negative earnings per share (EPS) of -$303.7. This suggests the company is performing poorly in terms of profitability. The lack of a price-to-earnings (PE) ratio due to negative earnings further reinforces this.
In terms of recent actions, Mullen has been active as it moved to address an issue with Lawrence Hardge, a former associate. This development may have added an element of uncertainty for investors. The company's recent commencement of deliveries of the Class 3 EV cab chassis trucks to Randy Marion Automotive Group following their $63 million order is an encouraging development. However, the negative sentiment from third-party assessments, advising investors to avoid this stock due to perceived instability, is a worrying sign for potential investors.
Technical Analysis
Considering the company's price activity, MULN is currently trading below both its 50-day moving average ($0.47) and significantly below its 200-day moving average ($2.94), indicating a bearish trend for the stock. The RSI14 at 46 suggests that the stock is neither overbought nor oversold.
The stock closed at $0.46, which is marginally closer to its day's high ($0.47) than its low ($0.44). The minimal change of $0.01 (1.67%) from the last close is a relatively stable move compared to the stock's usual movement, based on the high Average True Range (ATR) value of 19.35.
MULN's 3-month MACD remains below zero, a bearish sign. The stock may face resistance at the level of $0.49, while its support level is at $0.45.
The trading volume (7 million) is significantly lower than its average volume (221 million), which suggests a lower level of interest among investors.
The analyst consensus data does not provide any clear guidance, as there are currently no buy, hold, or sell ratings for this stock.
Stock Price Prediction
Based on the technical indicators and recent news, it is challenging to establish a clear price prediction for MULN. However, with the bearish indicators and recent negative news, the stock could potentially continue to trade in a lower range. The stock might hover around its current price, with some small variations up or down, given the volatility suggested by the ATR.
Evaluation and Recommendation
Given the lack of profitability signaled by the negative EPS, ongoing concerns raised in recent news, and the bearish technical indicators, the stock currently presents considerable risk. Therefore, it is recommended as a 'Sell' at this time. However, investors who believe in the company's long-term prospects in the EV industry should closely monitor MULN and consider it for investment when the company demonstrates more substantial signs of profitability and stability.
