Exro Technologies is a double from here, says Haywood

It’s time to get on the bus with Exro Technologies (Exro Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:EXRO), according to Haywood Capital Markets analyst Colin Healey, who commented on the company’s latest event in a client update on Tuesday.

Exro Technologies is a Calgary-based developer of intelligent control solutions for power electronics, announced on Tuesday a new supply agreement with BC-based Vicinity Motor Corp (formerly Grande West Transportation). Vicinity, which manufactures transportation vehicles for the public and commercial segments in the US and Canadian markets, including the Vicinity Bus, a purpose-built electric public transit bus.

The deal will see Vicinity first test and validate Exro’s Coil Driver powertrain integration with the intent of using it in future electric buses.

“We are constantly searching for innovative new ways to provide a best-in-class experience for our customers, delivering leading-edge technology at a price point suitable for mass deployment across small and large fleets,” said William Trainer, Founder and CEO of Vicinity, in an April 27 press release.

“Testing of the Coil Drive System, which offers lower energy consumption and high performance relative to existing systems, could prove to be an exciting competitive advantage and further extend the range of our electric buses,” Trainer said.

Get Cantech picks before anyone else does.

Cantech Alerts delivered straight to your inbox. Click here for this free service.

On the announcement, Exro CEO Sue Ozdemir said in the press release, “This commercial partnership highlights our dedication to bring the Coil Driver to emerging electric mobility markets and provide our partners with a clear edge over the competition.”

For his part, Healey said the announcement is very positive news for Exro as it shows continued acceleration along many pathways to commercialization of the Coil Driver technology, which is being advanced across multiple platforms including electric cars, buses, motorcycles and light transport.

“The agreement with Vicinity is an important step forward with a leading supplier of shuttle type transportation,” Healey wrote. “With the integration of Exro’s Coil Driver technology into the Vicinity bus powertrain, we would expect to see enhanced performance and efficiency, which in this segment would be focused on maximizing ‘range.’”

“We consider this a key partnership with a higher profile bus maker and expect Exro’s stock to respond well to the news as it signifies the beginning of a potentially lucrative relationship with a higher profile parter in the large public/commercial electric shuttle transportation segment,” Healey wrote.

Exro’s share price has been volatile since joining the TSX Venture this past September. The stock shot up from $1.26 to as high as $7.17 by mid-February, but then Exro was hit by a short-seller attack in early March, which brought EXRO back to around $4.00.

The short report alleged that Exro’s partnerships in commercialization were suspect, with the report’s authors also questioning the value of Exro’s technology. Exro has since replied to the allegations, as did Healey, who summed up the report by calling it “nothing more than an annoyance and distraction,” one which had no impact on his estimation of the company’s technology, its management, commercial prospects or valuation.

Get Cantech picks before anyone else does.

Cantech Alerts delivered straight to your inbox. Click here for this free service.

On the Vicinity announcement, Healey added that following a successful validation and testing period, the new agreement should lead to commercial sales and should also raise the profile of Exro’s technology with other potential customers.

“We continue to like Exro and expect further news flow of this type to incrementally move the stock higher and recommend adding to positions as the company progresses towards formal commercialization of multiple technologies,” Healey said.

With the update, Healey maintained his Top Pick status and “Buy” rating for Exro, along with a $8.00 per share target, which at the time of publication represented a projected one-year return of 100 per cent.

Healey is estimating Exro to generate 2021 revenue and EBITDA of $2.4 million and negative $6.2 million, respectively, 2022 revenue and EBITDA of $26.3 million and negative $0.3 million, respectively, and 2023 revenue and EBITDA of $55.5 million and $8.0 million, respectively.

Earlier this month, Exro delivered its annual shareholder letter, where Ozdemir said that while executing against the company’s business plan takes time to carry out, involving testing and product validation, Exro is not skipping any steps or leaving stones unturned.

“Our strategic plan involves continued development of our patents, deploying validated technology and commercializing for a profitable future. Exro is on track to drive our plan forward and bring something new to these emerging markets by optimizing the power within electric applications. We are dedicated to the mission of changing the way the world looks at energy,” Ozdemir wrote in an April 16 press release.

Along with its Coil Driver, Exro has developed a Battery Control System (BCS) for energy storage, which had its first validation through lab simulations in December and is ready to scale up the technology.

“We are on schedule for the BCS pilot to emulate grid performance and deliver our first stationary energy storage solution by end of 2021,” Ozdemir said.

Get Cantech picks before anyone else does.

Cantech Alerts delivered straight to your inbox. Click here for this free service.