Vmoto - Will the time come? 

It's worth considering that there may come a time, though not today, when Vmoto warrants our close attention once again. 

The company's share price has taken a hit, albeit not as severely as some others in the past two years, due to declining revenue and profit, a significant 27.5% dip, which is undeniably concerning.

Typically, a company on a backward trajectory should be of no interest. However, there’s an interesting context here. My hypothesis is that Vmoto experienced a remarkable boost during the height of the Covid-19 pandemic, and now they're feeling the aftershocks.

Two factors contributed to this boost:

• Consumers. Homebound individuals, flush with cash, indulged in purchases, including electric scooters. Much like larger items such as couches and TVs, consumers expedited their plans and invested in electric scooters.
• B2B Customers. Vmoto's substantial B2B revenue comes from food delivery companies that thrived as people ordered food from home. These companies expanded and renewed their fleets, creating a surge in demand. Fleet upgrades aren't an annual affair, so this year, orders are likely much more thin.

However, it's essential to remember that this downturn might not spell the end for Vmoto, and here's why:

• The company's $15 million investment in a new factory reflects their confidence in sustained long-term demand. Why else would management be expanding operations?
• This new facility will deplete their cash reserves, leaving approximately $14 million. I also expect they'll need further investments for molds, new bike models, and staff. Still, we could hypothesise this should leave them with a comfortable $10 million in cash.
• Crunching the numbers, at today's share price of $0.20, Vmoto’s is on a market capitalization of $59.50 million. With my estimation above, let’s say an anticipated future enterprise value of around $50 million. With the company presently delivering $5 million for half a year (just reported), that’s a forward PE of ~5. Not too demanding.

Of course, this hinges on the idea that the current setback is a temporary phase as Vmoto adjusts to a post-Covid reality. It's a significant "if." 

So, while today's price might not tempt us to buy, keeping a watchful eye on Vmoto seems fair. 

As noted by @Rick , competitors here are worrying. There's the new players, and the established bid brands like Vespa doing more electric models. This also needs to be kept in mind.