Zapp Electric Vehicles Group Limited

Zapp Electric Vehicles Group Limited (NASDAQ: ZAPP) is a United Kingdom-based electric motorcycle company. The Company designs, manufactures, and sells high performance electric vehicles. Its debut product, the i300, is an urban electric high-performance two-wheeler capable of traditional motorcycle levels of performance in a step-through format, combining ease of use with exhilaration and fun. Its models include the i300 Carbon Launch Edition, i300 Carbon, i300 Bio, and i300 Ocean.

Recent Business and Financial Updates

Zapp EV Announces Reverse Stock Split: Zapp Electric Vehicles Group Limited announced that its shareholders approved a 1-for-20 reverse stock split at the annual general meeting on April 11, 2024. Effective at 4:01 p.m. EDT on April 22, 2024, the company's share capital will be consolidated from USD 50,000 divided into 500,000,000 ordinary shares of USD 0.0001 each to USD 50,000 divided into 25,000,000 ordinary shares of USD 0.002 each. Trading on a split-adjusted basis will begin on Nasdaq on April 23, 2024, under the symbol "ZAPP" with a new CUSIP number G9889X 123. Each 20 existing shares will be combined into one new share, and fractional shares will be rounded up. The reverse split will uniformly affect all shareholders without altering their percentage interest in the Company's equity, except for rounding adjustments.

First Customer Deliveries of i300 Electric Urban Motorcycle: The first customer deliveries of the i300 electric urban motorcycle are expected in summer 2024, ahead of an accelerated commercial rollout planned in India and Southeast Asia. Zapp Electric Vehicles Group Limited, aims to revolutionize personal urban mobility. On June 20, 2024, Zapp EV reported its financial results for the six months ended March 31, 2024.

Recent Business Highlights: Zapp EV commenced its commercial rollout in India with a local partner serving as a contract manufacturer and supporting homologation in the country. The i300 was named a winner of the prestigious iF DESIGN AWARD 2024, increasing its design award tally to nine, including the Red Dot and Good Design awards. The Company received total proceeds of USD 2.7 million through the standby equity purchase agreement, additional at-the-market transactions, and other loans to initiate production and the commercial rollout of the i300 in the UK, EU, and Thailand. Additionally, launch activities for the i300 have commenced on the streets of Bangkok.

Financial Results for Six Months Ended March 31, 2024: For the six months ended March 31, 2024, Zapp EV reported an IFRS net loss of USD 5.0 million, an improvement compared to the USD 8.6 million loss in the same period in 2023. This net loss included a non-cash charge of USD 2.0 million related to the revaluation and termination of financial instruments issued in connection with the business combination in 2023. The operating loss was USD 3.1 million, compared to USD 3.9 million in the same period in 2023.

Raised Business Outlook: Zapp EV expects to make the first customer deliveries of the i300 in the fiscal fourth quarter of 2024. The Company anticipates selling more than 5,000 units in the fiscal year ending September 30, 2025. Sales in fiscal 2025 will be weighted toward the second half of the year, with a projected run-rate of more than 25,000 units per year to start the fiscal year 2026.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 58.70, upward trending, with expectations of a consolidation or some correction before the continuation of the uptrend. Additionally, the stock's current positioning is between both the 50-period SMA and 200-period EMA, which may serve as dynamic short to medium-term support and resistance levels respectively.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Zapp Electric Vehicles Group Limited (NASDAQ: ZAPP) at the current market price of USD 2.26 as of June 24, 2024, at 07:50 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is June 24, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.