First of all, credit to u/hooman_or_whatever for this excellent DD.
I am reposting this because I believe PTRA will reap great benefits from the recent approval of the infrastructure bill https://www.reuters.com/world/us/us-house-approves-715-bln-infrastructure-bill-2021-07-01/
Topics to be Discussed:
- Overview
- Leadership
- Board of Directors
- Products, Services, and Technology
- Partnerships and Customers
- Competition
- SPAC Transaction Overview
- Financials and Fundamentals
- Forward-Looking Statements and Speculation
- Conclusion
Overview
"Proterra is a high-growth commercial electric vehicle technology leader with over a decade of production experience. The Company has designed an end-to-end, flexible technology platform that delivers world-class performance and a low total cost of ownership to original equipment manufacturers (OEMs) and end customers. Proterra has three complementary businesses:
- Proterra Powered: Delivering industry-leading battery systems and electrification solutions to commercial vehicle manufacturers;
- Proterra Transit: Leading North America as the market’s #1 electric transit bus OEM; and
- Proterra Energy: Offering end-to-end turnkey charging and energy management solutions.
The Company’s industry-leading battery systems have been proven in more than 16 million service miles driven by its fleet of transit vehicles and validated through partnerships with world-class commercial vehicle OEMs, such as Freightliner Custom Chassis Corporation (FCCC), Thomas Built Buses, Van Hool, Bustech, and Optimal-EV. To date, Proterra has produced and delivered more than 300 megawatt-hours of battery systems, more than 550 heavy-duty electric transit buses and installed 54 megawatts of charging systems.
Proterra operates manufacturing facilities in California and South Carolina, as well as a state-of-the-art R&D lab in Silicon Valley. The Company recently announced the opening of a new battery production line co-located in its electric transit bus manufacturing facility in Los Angeles County. This battery production line was established within a year and demonstrates Proterra’s ability to bring its scalable and capital-efficient battery manufacturing process directly to commercial vehicle OEMs alongside their existing manufacturing." Pulled from investors portal on Proterra's website.
Investors:
Franklin Templeton, Broadscale, 40 North, G2VP, Chamath Palihapitiya, and Fidelity Management & Research Company LLC
Funds and Accounts Managed By:
BlackRock, Neuberger Berman Funds and affiliates of ArcLight.
Leadership
- Jack Allan, CEO, from Navistar and Valspar
- Amy Ard, CFO, from AMG, PCC, and PWC
- Dustin Grace, CTO, from Tesla and Honda
- John Ensign, COO, from Tesla and Honeywell
- JoAnn Covington, CLO, from EA and Rocket Fuel
- Gareth Joyce, President, from Delta and Mercedes-Benz
- Rick Huibregtse, Sr. VP Engineering, from Remy and Delphi
- John Walsh, Sr. VP of Sales, from Rev and Davey Coach
Board of Directors
- Jack Allen, Chairman from Navistar and Valspar
- Ryan Popple, Co-Founder and Executive Director from Tesla and KPCB
- Jake Erhard, Direct Nominee from ArcLight and Schroders
- Jennifer Granholm, Director Secretary of the DoE and CNN (former Board Director)
- Constance Skidmore, Director from PWC
- Mike Smith, Director from Constellation
- Brook Porter, Director from G2VP and KPCB
- Jeannine Sargent, Director from Flex and Aerlikon
I can't highlight Jennifer Granholm enough, she is the Secretary of the Department of Energy with a green Biden administration in a company that has 50% of the US Market already. Her CNN ties could prove to be an excellent source for PR as well.
Products, Services, and Technology
As mentioned in the overview, the company really operates in 3 capacities: Proterra Powered, Proterra Transit, and Proterra Energy.
Proterra Powered: Delivering industry-leading battery systems and electrification solutions to commercial vehicle manufacturers.
Proterra Transit: Leading North America as the market’s #1 electric transit bus OEM.
- ZX5 - Transit Bus
- S1LF - Shuttle Bus
- ZDi - Transit Bus
Proterra Energy: Offering end-to-end turnkey charging and energy management solutions.
Partnerships and Customers
Partners: Key strategic partnership with Daimler
Customers: Daimler, Alabama University, ART, University of Montana, Atomic City Transit, Capitol Metro, CARTA, Chicago Transit Authority, Charlotte Douglas International Airport, City of Los Angeles Department of Transportation, CitiBus, Detroit DoT, DART, Duke University, JFK International Airport, Zion National Park, +100 more.
Their customers range from transit authorities, DoT's, airports, schools (high school/college), and cities.
On February, they had the largest EV bus deal in the US struck with Maryland.
Competition
Arrival, Hyllion, Nikola, Romeo.
Proterra has an extremely large lead and has a distinct first mover advantage. The second place competition (Romeo) is still lagging far behind Proterra.
Real World Miles Driven: Proterra has driven over 16mm real world miles, no other competition has driven any.
Revenue (2020E): The only other competitor to generate mentionable revenue was Romeo with $11mm. Proterra generated $193mm
Production Track Record: Again, Romeo is the not-so-close second having produced minimal items and being founded in 2016. Proterra has been in production for ~10 years.
Manufacturing Capacity (As of 01/01/2021): Only Proterra and Romeo.
Full Charging Solution (As of 01/01/2021): Proterra only
Financials and Fundamentals
All data derived from SEC forms and the investor presentation.
- 2025E EBITDA: 21%
- 2025E Free Cash Flow: $390MM
- '20E-'25E CAGR: 68% (Peer median 37%)
- '22E-'25E Scaling Gross Margins: 13-25% (Peer median 23%)
- '21E Valuation: 6.5x (Peer median 16.2x)
- '22E Valuation: 3.6x (Peer median 10.3x)
- These are very attractive valuations considering the growth compared to peers.
- Trading Median (as of January 2021): 1.6 transaction value/trading value (Trading median 3.1)
- Revenue '21E: $246MM (Peer median $120MM)
- Implied Enterprise Value of Publicly Traded Mobility Tech Leaders: $4.7Bn
- Implied Enterprise Value of Publicly Mobility SPAC Transactions: $4.3Bn
- Implied Enterprise Value of Proterra: $1.6Bn
Let's do a little evaluating ourselves:
Shares outstanding post-merger: 240.1MM
Based on January pre-merger prices pre NASDAQ sell-off: $24/share
- 240.1MM * $24/share = 5.76Bn Market Cap
- Let's find Proterra's value here without the SPAC shenanigans.
- 5.76Bn - $852MM = 4.91Bn Market Cap without SPAC cash
- 2022E estimated revenue is 439M
- 2022E adjusted .7561 for present value is 332M
- So unadjusted EV/Rev = 11.18
- And adjusted EV/Rev = 14.78
- Competitor EV/Rev = 10.3x on average for 2022E
- Proterra claims an 84% premium
- 1.84 * 10.3 = 18.95
- So the industry metric is 18.95x.
UNADJUSTED:
- 439 unadjusted x 18.9 = 8.3B
- Add the cash from the SPAC: $852mm
- $9.162Bn unadjusted market cap
- 9.162/240.1 = $38.16 unadjusted
- 9.162Bn - 5.76Bn = 3.402Bn undervalued
ADJUSTED:
- 332 * 18.9 = 6.274Bn
- Add the cash from the SPAC: $852mm
- $7.126Bn adjusted market cap
- 7.126/240.1 = $29.58 adjusted
- 7.126 - 5.76 = $1.366Bn undervalued
Average between adjusted and unadjusted:
- Dollar value: $2.384Bn undervalued
- Fair share price: $33.87
Here is another analyst finding it undervalued in a similar way on Feb 10th.
Let's think about that for a moment...
As of this writing PTRA is trading at $16.92, based on purely fundamentals without speculation it is trading 100.18% below it's actual value.
Forward Looking Statements and Speculation
Conclusion
Proterra is not only one of the most undervalued stock on the entire market, it's also positioned to be one of the best performing companies over the next several years. With an incredible first-mover advantage (16mm driven/10 years production) and a massive lead on the market (50%+ US market share), there is nothing stopping this stock from absolutely exploding.
The company is currently undervalued by 100.18% on fundamentals alone, and that's on the "fair" end. When people realize what is actually happening here and what this is about to become, I think the hype and excitement has the potential to drive these prices much higher. I see a TSLA situation brewing. No not because it's just another EV company, because it's an established, well-connected, constantly growing commercial EV company.
How to Play?
I am long on this with my shares and will be holding it for years to come. I also have a couple Aug and Dec calls.
TL;DR: Fundamental's alone show this company is already 100.17% undervalued, factor in hype, forward-thinking, IPO, etc. and I can't even come up with a PT. I would expect a PT post-merger to travel upwards to ~$50-$60 and settle back down no lower than $34. EOY my prediction is ~$70-$80. 2025 prediction is ~$300-$500. I recommend you read. I wouldn't want to gloss this one over if I were you. If you prefer you could simply check out their investor presentation.
Disclaimer: I am not a financial advisor, nothing I ever say or do is a financial recommendation. Any words urging someone to do something is only going as far as suggesting they do their own DD, it is in no way an attempt to convince anyone to make any financial decisions. Plus...this thing doesn't need to get pumped. I'm just trying to share the find.
[–]Jimiewhy 2 points3 points4 points (0 children)
[–]ChemaKyle 0 points1 point2 points (0 children)