$PTRA - The Ultimate EV Infrastructure Play

PROTERRA - NOT YOUR TYPICAL EV STOCK THAT HAS GREAT POTENTIAL 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/ ​Proposed Infrastructure Bill As you can see PTRA directly benefits heavily in two different sections of the proposed bill. Topics to be Discussed: Overview Leadership Board of Directors Products, Services, and Technology Partnerships and Customers Competition 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. It's also important to mention that the Biden administration have mentioned Proterra multiple times. 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. DriveTrain Technical information here Battery Pack Technical information here High Voltage System Components and Integration (Junction Boxes, Thermal Management Systems, Telematics Gateways, Charge Controllers and Integration Controllers). 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. Fleet Planning Fleet Charging Infrastructure Smart Energy Management Pay-As-You-Go See the full services information here. 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 Merger 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 merger shenanigans. 5.76Bn - $852MM = 4.91Bn Market Cap without merger 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 merger: $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 merger: $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. https://preview.redd.it/l9xl0k0l7u971.png?width=784&format=png&auto=webp&s=da575bbc6555e3b028b9ab91ecbc27efc084e61a https://preview.redd.it/33c543ml7u971.png?width=624&format=png&auto=webp&s=748f0f6ef9d0989a03f791c5e8de1f6ff2a425ba 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 Vehicle to grid technology EV Construction Equipment with Komatsu Delivery Truck Garbage Trucks, Tractor Trailers, Big EV Vehicles Bus Market Projected to be 50% Electrified by 2025 California Transitioning to All Electric Bus Fleet by 2040, same link 25k of NA buses must be 100% emission free by 2040 Zero Emission Buses Now 26% of Active Bid Universe Proterra’s Customers Operate Over 30% of the N.A. Transit Bus Fleet TAM $260Bn Established Partnerships Serve a Target Segment Market Opportunity of ~175,000 Annual Vehicles Proterra CURRENTLY has 50%+ Market Share Current and Future Prospects: Not Just Creating Electric Buses, They Run The Entire Ecosystem for Large Scale EV Fleets Massive Green Initiative from the Biden Administration The Biden Climate Plan is a $2T Plan Jennifer Granholm is impatient and wants results, she is the Secretary of the Department of Energy....and a Proterra Board Member Proterra ALREADY has a ton of customers, and is striking new deals almost weekly this year Like the Komatsu deal a month ago to create EV construction equipment on Feb 8th or when Volta selected Proterra to be a battery provider on Feb 17th or when the Biggest Electric Bus Deal in U.S. was Approved in Maryland on Feb 23rd or when Montgomery County Public Schools approved the nation’s largest procurement of electric school buses on February 25th Conclusion Proterra is not only one of the most undervalued EV 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? Shares and a couple Aug and Dec calls. Options are cheap and have low IVs. TL;DR: This is the ultimate infrastructure play. Disclaimer: Not financial advice.

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$PTRA - The Ultimate EV Infrastructure Play

bullish

PROTERRA - NOT YOUR TYPICAL EV STOCK THAT HAS GREAT POTENTIAL

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/

Proposed Infrastructure Bill

As you can see PTRA directly benefits heavily in two different sections of the proposed bill.

Topics to be Discussed:

  • Overview
  • Leadership
  • Board of Directors
  • Products, Services, and Technology
  • Partnerships and Customers
  • Competition
  • 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. It's also important to mention that the Biden administration have mentioned Proterra multiple times.

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 Merger 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 merger shenanigans.
  • 5.76Bn - $852MM = 4.91Bn Market Cap without merger 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 merger: $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 merger: $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 EV 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?

Shares and a couple Aug and Dec calls. Options are cheap and have low IVs.

TL;DR: This is the ultimate infrastructure play.

Disclaimer: Not financial advice.

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