Is Helbiz a Buy Under $4?

Micro-mobility solutions company Helbiz (HLBZ) made its stock market debut through an SPAC deal last August. However, the company’s shares have since foundered amid a global chip shortage and rising logistical hurdles. So, because the markets remain volatile amid increasing macroeconomic uncertainties, will HLBZ be able to gain momentum soon? Read on to learn our view.

Helbiz, Inc. (HLBZ) in New York City is a micro-mobility services company that manufactures and sells e-scooters, e-bicycles, and e-mopeds in 35 cities worldwide. On August 13 last year, the company went public through a reverse merger with blank-check company GreenVision Acquisition Corp. HLBZ raised $24.50 million in gross cash proceeds through the merger. The company plans to utilize the funds to expand its mobility services in the United States and Europe and accelerate the development of adjacent service categories, such as food delivery, integrated payment options, live streaming services, etc.

Regarding its stock market debut, HLBZ’s CEO Salvatore Palella said, “The public debut of Helbiz is a significant milestone, not only for us as a company, but for the rapidly growing micro-mobility industry. This transportation revolution has allowed us to advance our mission to solve first-and-last-mile mobility needs for cities around the world with zero impact on the environment. Now operating in 35 international cities, we are committed to providing safe, innovative micro-mobility solutions that are needed to reduce each city’s congestion, pollution, and carbon footprint. With this new funding, we look forward to making life better in even more cities around the world.”

Nevertheless, HLBZ’s shares have declined 79% in price since its public debut to close Friday’s trading session at $3.32. The bearish investor sentiment regarding the electric vehicle (EV) industry amid rising production costs amid a global chip shortage has caused the stock to decline in price since last August.

Here is what could shape HLBZ’s performance in the near term:

Bleak Financials

HLBZ’s revenues increased 133.6% year-over-year to $4.70 million in its fiscal third quarter, ended Sept. 30, 2021. However, the company’s total operating expenses rose 219.4% from the same period last year to $24.37 million. Its loss from operations widened 250.1% from its year-ago value to $19.67 million. Its net loss worsened 400.7% from the prior-year quarter to $28.32 million, and its loss per share widened 275.9% year-over-year to $1.09.

Negative Profit Margins

HLBZ’s trailing-12-month gross profit margin is negative 129.3%. Its negative 183.29% levered free cash flow margin compares with the 5.17% industry average. In addition, HLBZ’s ROA and ROTC are negative 159.92% and 422.87%, respectively.

POWR Ratings Reflect Bleak Prospects

HLBZ has an overall F rating, which equates to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has a D grade for Value, Stability, and Quality. HLBZ’s 6.68 forward Price/Sales multiple is 353.3% higher than the 1.47 industry average, which is in sync with its Value grade. In addition, the stock’s negative 0.60 beta matches its Stability grade. And its negative profit margins justify its  Quality grade.

Among the 69 stocks in the F-rated Auto & Vehicle Manufacturers industry, HLBZ is ranked #54.

Beyond what I have stated above, view HLBZ ratings for Growth, Momentum, and Sentiment here.

Bottom Line

HLBZ has been actively expanding its international market reach through strategic partnerships. So far this year, the company has partnered with Australian EV manufacturer Vmoto Soco, Segway, and Italy-based Leasys S.p.A of the Stellantis Group. However, because the global chip shortage persists, HLBZ’s profit margins and ROI are expected to remain negative in the near term. Analysts expect the company’s EPS to remain negative until at least 2022. Thus, HLBZ is best avoided now.

How Does Helbiz, Inc. (HLBZ) Stack Up Against its Peers?

While HLBZ has an F rating in our proprietary rating system, one might want to consider looking at its industry peers, Hino Motors, Ltd. (HINOY), Daimler AG (DDAIF), and Bayerische Motoren Werke Aktiengesellschaft (BMWYY), which have a B (Buy) rating.

Click here to checkout our Electric Vehicle Industry Report for 2022

HLBZ shares were trading at $3.21 per share on Monday afternoon, down $0.16 (-4.75%). Year-to-date, HLBZ has declined -41.53%, versus a -7.39% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.


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