Company Overview
REE Automotive Ltd. operates as an automotive technology firm with a geographic footprint spanning France, the United Kingdom, the United States, Germany, and various international markets. The company focuses on delivering electric and software-defined vehicle (SDV) solutions, which include X-by-Wire systems, specialized software services, and complete commercial electric vehicle packages. This entity functions within the Consumer Cyclical sector, specifically categorized under the Auto Parts industry, positioning it as a supplier of critical components and technologies to the broader automotive ecosystem. The company's scale is defined by a market capitalization of $16.72M, an annual revenue of $207,000, and a workforce of 211 employees. These valuation and revenue figures indicate that the company maintains a micro-cap profile, suggesting it is a smaller-scale player relative to major automotive conglomerates, which often correlates with higher volatility and a reliance on niche technological adoption rates rather than mass-market volume sales.
Financial Health
The company reports a trailing twelve-month revenue of $207,000, yet it posts a net income of $-100,098,000 and an EBITDA of $-90,737,000. The substantial gap between the nominal revenue and the massive negative net income reveals a cost structure where expenses, likely including significant R&D or operational overhead, vastly exceed income generation capabilities on a per-unit basis. Free cash flow stands at $-53,149,376, indicating that the company is burning cash at a rate that exceeds its operational cash generation, which limits its financial flexibility for discretionary spending or debt repayment without external financing. Margin analysis shows a gross margin of 0.0%, an operating margin of -29347.3%, and a profit margin of 0.0%, levels that suggest the company is currently unable to cover its direct production costs or fixed operating expenses with the revenue it generates. Despite these negative operational metrics, the balance sheet holds $54.67M in cash against $38.02M in debt, resulting in a debt-to-equity ratio of 105.75, which signifies a highly leveraged position where liabilities exceed equity. The current ratio of 1.74 suggests that the company possesses sufficient short-term assets to cover its short-term liabilities, providing a layer of liquidity despite the cash burn. Return on Equity is -202.6% and Return on Assets is -57.1%, metrics that reveal management is currently destroying value rather than generating returns on the capital invested by shareholders or utilized by the company.
Valuation Assessment
Valuation metrics for REE Automotive Ltd. present a complex picture, with a trailing P/E ratio of N/A and a forward P/E of -0.26. The absence of a positive trailing P/E and the negative forward P/E imply that the company has not yet achieved profitability, making traditional earnings-based valuation methods inapplicable for the current period. The price-to-book ratio is 0.46, indicating that the market is valuing the company at less than half of its book value, which often suggests the market discounts the company's assets or anticipates continued operational challenges. Alternative valuation measures such as a price-to-sales ratio of 80.79 and an EV/EBITDA of 0.00 suggest that the market is pricing the stock based on revenue potential rather than earnings, though the zero EV/EBITDA underscores the lack of economic profit. The stock has traded between a 52-week high of $4.01 and a 52-week low of $0.51, and without a specific current price provided in the facts, the trading range indicates extreme volatility within the sector. The beta of 2.76 indicates that the stock price is significantly more volatile than the broader market, moving nearly three times as much as the market index in response to price changes.
Growth & Income
Growth metrics for the company are unavailable, with revenue growth year-over-year listed as N/A and earnings growth year-over-year also listed as N/A. The lack of available growth rates prevents a direct comparison between the speed of earnings expansion versus revenue expansion, but the existing financial data suggests the company is in a pre-profitability phase rather than a high-growth profitable phase. Regarding income distribution, the company does not pay a dividend, evidenced by a dividend yield of N/A and a payout ratio of 0.0%. This zero payout ratio indicates that the company retains all of its earnings, or rather, reinvests its remaining operational capacity and cash reserves into its business operations rather than distributing income to shareholders. The overall growth and income profile is characterized by a complete absence of current income generation and undefined growth rates, relying entirely on the depletion of its cash reserves to fund operations and future development efforts.