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Mullen Automotive (NASDAQ:MULN) stock hasn’t given investors much cause for optimism throughout 2023. Far from it, in fact. The electric vehicle (EV) producer has shed about 95% of its value over the past year amid a cascade of bad news and missed deadlines.
This week, MULN stock proved yet again how unstable it can be, plunging to a new 52-week low. As InvestorPlace contributor Chris MacDonald notes, the company is facing plenty of economic headwinds that have helped push down shares this year. However, some apparently still see Mullen as having significant growth potential, despite evidence to the contrary. Few price targets for this troubled meme stock have been released, but there are two listed on Fintel that project MULN surpassing $20 per share by 2024.
Does this mean that Mullen is finally destined for a turnaround? Given everything that has transpired, it’s highly unlikely. Let’s take a closer look at how high these targets call for MULN stock to go.
What’s Happening With MULN Stock?
Market analysis platform Fintel recently listed the average one-year price target for MULN stock as $23.46 per share. More specifically, the forecasts cited on the platform range from a low of $23.23 to a high of $24.15. Given that MULN currently trades at around 13 cents, however, reaching the projected $23 mark would mean a rise of 15,655%. That’s certainly incredibly ambitious — especially for a company that has struggled as much as Mullen.
Rising more than 15,000% in less than two years would be an ambitious goal for even the strongest growth stocks. The experts who issued these aforementioned price targets have not been named on Fintel. As such, the context for the reasoning behind the projections is unclear. What is clear, however, are the reasons MULN stock is unlikely to even come close to $3, let alone exceed $23.
News of these ambitious price targets hasn’t pushed MULN stock up. Today, shares closed down by more than 9%. This decline comes even after the company actually reported some good news, claiming it is on track to fulfill a cargo van delivery order. Given Mullen’s history of missing deadlines, it’s hard to take announcements like this seriously. The company is currently in danger of getting delisted from the Nasdaq after missing its deadline to hit $1 per share.
InvestorPlace analyst Thomas Yeung also recently reported that Mullen’s balance sheet is weaker than it appears, noting the company is facing an “increasingly uphill battle.” Despite expressing some admiration for its ability to continue treading water, Yeung foresees difficult days ahead:
“Eventually, the trick becomes harder to pull off. Impatient bondholders start demanding to see production vehicles. Goodwill begins to overwhelm Mullen’s balance sheet, decreasing its attractiveness. And retail investors eventually tire of losing money. No levitation trick lasts forever.”
The Road Ahead
Yeung is correct that Mullen has managed to stay in the game longer than expected. But every day seems to bring more bad news threatening any shot at progress the EV company has. In just March 2023, Mullen has seen its financier charged with insider trading and one of its auditors resign.
Above all, it’s important to remember that MULN stock has largely stayed relevant because of retail investor interest. That doesn’t make it a good bet. And it certainly doesn’t mean shares can get anywhere close to $23.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
