Automotive company Mullen Automotive, Inc. (MULN) distributes and sells electric vehicles (EVs). The company also operates CarHub, a digital platform that leverages AI to offer an interactive solution for buying, selling, and owning a car. MULN has an average volume of 77.65 million.
On September 21, MULN’s CEO David Michery received 9.62 million shares as a part of a stock award agreement. However, on the next day, Michery sold 750,000 shares at an average price of 40 cents per share. This year, he sold shares on seven occasions, bringing the total sold shares count to 2.53 million.
The stock has declined 95.4% year-to-date and 55.6% over the past month to close its last trading session at $0.24. It is trading below its 50-day and 200-day Moving averages of $0.56 and $1.57.
Here are the factors that could affect MULN’s performance in the near term:
Recent Acquisition
In September, MULN updated its shareholders regarding its majority acquisition of Bollinger Motors, Inc. David Michery, CEO and chairman of MULN, said, “All cash and stock required to close the Bollinger transaction on Sept. 7, 2022, has been funded or placed in escrow as required by the transaction documents.”
Bleak Financials
For the fiscal quarter that ended June 30, MULN’s loss from operations came in at $18.22 million, up 184.5% year-over-year. Its net loss increased 289.9% from the prior-year quarter to $59.47 million. Its net loss per share came in at $0.16.
Negative Profit Margins
MULN’s trailing-12-month ROTC of a negative 618.14% is significantly lower than the industry average of 6.88%. Its trailing-12-month ROA of a negative 169.94% compares to the industry average of 5.12%.
POWR Ratings Reflect Bleak Prospects
MULN’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MULN has a Value grade of F, in sync with the stock’s trailing-12-month Price/Book multiple of 6.25, which is 220.2% higher than the industry average of 1.95. The stock also has a D grade for Quality, consistent with its bleak profit margins.
In the 65-stock Auto & Vehicle Manufacturers industry, it is ranked #57. The industry is rated D.
Click here to see the additional POWR Ratings for MULN (Growth, Momentum, Stability, and Sentiment).
View all the top stocks in the Auto & Vehicle Manufacturers industry here.
Bottom Line
The company’s CEO selling its stock might make investors anxious. Moreover, its bleak bottom-line positioning is concerning. Also, the stock is trading below its moving averages, signaling a downtrend. Hence, it might be best avoided now.
How Does Mullen Automotive, Inc. (MULN) Stack Up Against its Peers?
While MULN has an overall POWR Rating of F, one might consider looking at its industry peers, Subaru Corporation (FUJHY) and Jardine Cycle & Carriage Limited (JCYGY), which have an overall A (Strong Buy) rating, and Hyundai Motor Company (HYMTF) and Isuzu Motors Limited (ISUZY), which have an overall B (Buy) rating.
MULN shares fell $0.24 (-100.00%) in premarket trading Friday. Year-to-date, MULN has declined -95.41%, versus a -21.18% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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