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Mullen Automotive (NASDAQ:MULN) stock has not provided much cause for optimism for investors in 2023. Not even close. The electric vehicle (EV) maker has lost about 95% of its value over the past year amid a cascade of bad news and missed deadlines.
This week, MULN stock proved once again just how unstable it can be and plunged to a fresh 52-week low. As InvestorPlace Contributor Chris MacDonald notes that the company has faced many economic headwinds that have helped push shares lower this year. However, some still seem to see significant growth potential for Mullen, despite evidence to the contrary. Few price targets have been released for this battered meme stock, but there are two stocks listed on Fintel that expect MULN to surpass $20 per share by 2024.
Does this mean Mullen is finally destined for an about-face? Given what happened, it’s highly unlikely. Let’s take a closer look at how high these goals are asking MULN stock to be.
What is happening to MULN stock?
Market analysis platform Fintel recently put the average one-year price target for MULN stock at $23.46 per share. More specifically, the predictions cited on the platform range from a low of $23.23 to a high of $24.15. However, given that MULN is currently trading at around 13 cents, hitting the projected $23 level would mean a 15,655% gain. That’s certainly incredibly ambitious — especially for a company that’s been struggling as much as Mullen.
A gain of more than 15,000% in less than two years would be an ambitious target for even the strongest growth stocks. The experts who issued these price targets above were not named on Fintel. Therefore, the context for the reasoning behind the projections is unclear. Clearly, however, are the reasons why MULN stock is unlikely to even get close to $3, let alone surpass $23.
News of those ambitious price targets didn’t propel MULN shares higher. Today, shares closed up more than 9%. That drop comes even after the company actually reported some good news, claiming it’s on track to fulfill a van delivery order. Given Mullen’s history of missing deadlines, it’s difficult to take announcements like this seriously. The company is currently threatened with delisting from the stock exchange Nasdaq after missing its deadline to hit $1 a share.
InvestorPlace Analyst Thomas Yeung also recently reported that Mullen’s balance sheet is weaker than it appears, noting that the company faces an “increasingly uphill battle.” While Yeung expresses admiration for his ability to continue treading water, he foresees difficult days:
“At some point it becomes more difficult to pull off the trick. Impatient bondholders are demanding to see production vehicles. Goodwill begins to overwhelm Mullen’s balance sheet, reducing his attractiveness. And small investors eventually get tired of losing money. No hover trick lasts forever.”
Along the road
Yeung is right that Mullen managed to stay in the game longer than expected. But every day seems to bring more bad news that threatens any chance of the EV company making progress. In March 2023, Mullen witnessed his financier face charges of insider trading and one of his auditors resigning.
Above all, it’s important to remember that MULN stock has remained broadly relevant due to interest from retail investors. That doesn’t make it a good bet. And that certainly doesn’t mean stocks can get anywhere close to $23.
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At the time of publication, Samuel O’Brien held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.
Samuel O’Brien has been covering financial markets and analyzing economic policy for more than three years. His areas of expertise include electric vehicle (EV) stocks, green energy and NFTs. O’Brien loves helping everyone understand the complexities of economics. He is in the top 15% of stock pickers on TipRanks.