With a market cap of $232 million USD, Chinese automaker Kandi Technologies Group (NASDAQ:KNDI) is a small-cap play in the popular Electric Vehicles (EV) market. KNDI stock currently sells for $4.42 USD but earlier in the year, it skyrocketed to just over $9.
The question for investors becomes—is this a small-cap play that could reach those highs again, if not even further?
Selling for less than $5 a share puts Kandi Technologies Group in penny stocks territory. It’s an ambiguous place to be—especially in a market that is so dominated by giants like Tesla (NASDAQ:TSLA), Nissan (OTCPK:NSANY), and Ford (NYSE:F). Is it possible for Kandi Technologies to eke out its place in a crowded market?
Well, according to MarketWatch, KNDI “is one of those names that has been bandied about for years as a small-cap stock on the verge of a massive breakout.”
However, it seems that operating in the exciting and often hype-driven EV market isn’t enough; that breakout has yet to come.
About Kandi Technologies Group
Centering its business around EVs and with a presence in the high-potential marketplace of China, on paper, Kandi could convince many that it will explode.
But unfortunately, China’s government removed subsidies that encouraged shoppers to buy EVs. This is just one of several reasons that the EV boom never transpired for Kandi; demand for particular EV models dried up. As such, the company’s revenue has remained down sharply from its 2015 peak.
Of course, KNDI stock has reflected this downfall.
Back in February of this year, that breakout seemed imminent. Shares surged to over $9 on the news that Kandi was approved to import its EVs to the US.
It was a headline that investors were waiting for and encouraged many “to get in early.” However, since then, the relationship between China and the US has been tepid amid trade war tensions and business has once again not boomed as the potential suggested.
However, if you are a bold investor and enjoy taking risks on speculative stocks, then for less than $5 USD, KNDI stock could turn around.
Will it? Won’t it? What do you think?
Featured Image: DepositPhotos © PavelIvanov