REE Automotive Ltd. recently saw a significant drop in short interest during the month of May. With short interest totalling 596,900 shares as of May 31st, this represents a 42.6% decrease from the total of 1,040,000 shares recorded on May 15th. Based on an average daily volume of 529,500 shares, the days-to-cover ratio is presently at 1.1 days.
Despite this drop in short interest, shares of REE opened at $0.39 on Tuesday, with a 50-day moving average of $0.35 and a 200 day moving average of $0.40. Over the past year the company has seen its share price fluctuate between a low of $0.27 and a high of $1.74.
A number of hedge funds recently added to or reduced their stakes in the stock, including Invesco Ltd., Sonic GP LLC, Millennium Management LLC, Morgan Stanley and Renaissance Technologies LLC among others who now collectively own approximately one quarter of the company’s stock.
REE Automotive operates within the e-mobility business and focuses its efforts on developing unique technologies that integrate vehicle components such as steering, braking, suspension and powertrain into the arches of wheels – known as REEcorner technology – as well as flat and modular EV chassis’ called REEboard.
The company’s last quarterly earnings data was released on Thursday March 16th where they reported -$0.09 earnings per share for that quarter alone; however research analysts suggest that by end-of-year figures will show earnings per share to be at approximately -$0.35 for FY2021.
Overall it seems these developments indicate an interesting set-up for investors looking for possible entry-points into REE Automotive at a lower share price but given current overall market conditions it remains unclear how sentiment may play out over time as always with any form speculation we can only monitor and wait to see how things evolve.
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REE Automotive: Analysis of Recent Downgrade and Future Potential
In today’s world, the stock market is a fickle mistress – seemingly changing on a whim with every single news headline. Companies can find themselves soaring one second and plummeting the next depending on even the slightest shift in tides. That being said, it is not uncommon for research analysts to downgrade stocks from an “overweight” rating to a “neutral” rating based upon data interpretation. This appears to be exactly what has happened with REE Automotive.
Cantor Fitzgerald recently downgraded REE Automotive from an “overweight” rating to a “neutral” rating and decreased their target price for the company from $2.00 to $1.00 in a research report on Thursday, March 16th. Unsurprisingly, this caused some concern among investors who had previously been bullish on REE Automotive.
However, it’s not all doom and gloom for this electric vehicle manufacturer just yet. Two equities research analysts have rated the stock with a hold rating and three have assigned a buy rating to the company’s stock. Even more promisingly, based on data from Bloomberg, REE Automotive has an average rating of “Moderate Buy” which should give investors hope that things will turn around.
All of that being said, there is still reason for caution when considering investing in REE Automotive at this time. The consensus price target of $3.63 may seem promising but until more positive news emerges about their solvency or innovation potential investors may be wise to wait before jumping into the fray.
In conclusion, while it’s certainly disappointing to see any company downgraded it does not necessarily signify complete failure for said business. With multiple buy ratings still assigned to REE Automotive investors should continue to keep an eye on this electric vehicle manufacturer as they work towards developing cutting edge technology in an ever-changing field. As always with investments, due diligence is key – so don’t rush in blindly and be sure to keep a watchful eye on any developments moving forward.