Write Up; Upgrades G&M Dec 15 Exro Technologies Inc. (
) is “an emerging leader” in powertrain technology for electric vehicles, according to Raymond James analyst Michael Glen.
In a research report released Tuesday, he initiated coverage of Vancouver-based company with an “outperform” rating.
“The company’s specific focus is on the inverter or power electronics in an electric vehicle/electric mobility architecture, and their patented technology (which they call the Coil Driver) which offers a number of important advantages versus conventional electric vehicle architectures,” he said.
“While the technology is still undergoing a phase of testing and demonstration, management has successfully hit a number of key milestones over the past year through their establishment of eight strategic partnerships and engineering validation on the 100V Coil Driver for the electric car. We fully anticipate further developments through 2021, as Exro collects data from in-field deployments.”
Mr. Glen pointed to three factors driving his conviction toward Exro: the view its coil driver technology provides the customer “a superior and more efficient system at a lower overall cost;” the presence of CEO Sue Ozdemir, who “brings an extensive (effectively, a lifetime) of global electric motor executive management and leadership to the operation;” and a first-mover advantage from the coil driver.
“We acknowledge that valuing a stock like Exro is challenging and there are a number of higherrisk characteristics to take into consideration,” he said. “The company has a unique technology that offers a number of advantages to its customers, and we see them positioned in a segment of the market that is about to see a massive amount of growth. Additionally, with the recent closing of the $42-million equity financing (12.9 million shares at $3.25), we see the company as extremely well-capitalized in terms of funding its future growth.”
Mr. Glen set a $7 target, exceeding the $4.85 consensus.
“One of the key developments that we will continue to monitor through 2021 is the potential establishment of a commercial/strategic relationship with a larger global OEM/Tier 1 supplier for the rollout and use of Exro’s Coil Driver in their platform,” he said. “This would represent a substantial catalyst for the stock, and we believe that management is actively engaged in such discussions to varying degrees across a range of light-vehicle and medium/heavy-duty mobility applications. Additionally, we also believe that the recent disclosure regarding success in the testing of the 100V Coil Driver was a key milestone in pushing some of these conversations forward.”