Electrameccanica Vehicles Corp. (SOLO) Stock Might Be Overheated

In the period that ended January 31, 2019, short interest in Electrameccanica Vehicles Corp. (NASDAQ:SOLO) stock is on the decline. The 34.2% drop could be an indication that investors and traders expect a strength in the stock price, often as a result of a strength in the business’ fundamentals. The average analyst recommendations at 0 suggests selling these shares. Between January 15 and January 31, the total number of shorted shares amounted to 237.4 thousand shares. That was 123,384 less shares than the total of 360.78 thousand shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for SOLO at the January 31st settlement plunged to 100,523, as compared to 242,300 at the January 15th report. That brought days to cover to 2.361629, a 58.61% increase from the 1.488989 days to cover recorded at the prior short interest data release.

The stock is currently hovering around the first support level of $2.48. Below this, the next support is placed in the zone of $0.62. Till the time, the SOLO stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 92.31 on daily chart, which may remain a cause for concern. If the price breaks below $0.62 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $5.31 mark may result into a pull-back move towards $6.28 level.

On 13th of February, Electrameccanica Vehicles Corp. (NASDAQ:SOLO) shares ended higher after a volatile session. The shares accumulated 2.98 points or 220.74 percent at $4.33 with a light trade volume of 38.789 million shares. After opening the session at $1.68, the shares went as high as $4.43 and as low as $1.6, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $120 million and now has 27.79 million shares outstanding. Electrameccanica Vehicles Corp. (SOLO) stock has gained 218.38 percent of market value in 21 trading days.

SOLO stock has a trailing 3-year beta of 0, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.37 a share in the trailing twelve months. The stock’s value has surged 306.57 percent year to date (YTD) against a decline of -54.9 percent in 12 month’s time. The company’s shares still trade -56.7 percent away from its 1-year high of $10.00 and 381.11 percent up from 52-week low of $0.90. The average consensus rating on the company is 0, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Electrameccanica Vehicles Corp. (SOLO) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry SOLO operates in has an average P/E of 13.81. Its P/E ratio went as low as 0X and as high as 0 over the 5-year span. Further, it is sporting a 240.66 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.08. 31.5 percent is the gross profit margin for Electrameccanica Vehicles Corp. and operating margin sits at 0 percent. Along with this, the net profit margin is 0 percent.

Let’s take a look at some insider activity at Electrameccanica Vehicles Corp. (NASDAQ:SOLO) and see the pattern.