Why Kandi Technologies (KNDI) Stock Is Up Today

NEW YORK (TheStreet) -- Kandi Technologies (KNDI) was gaining 9.9% to $15.38 Monday after a joint venture received new energy vehicle subsidies from the Chinese central government.

Kandi Electric Vehicles Group, the manufacturing subsidiary of Kandi, received a national subsidy for selling more than 3,000 electric vehicles from June 2013 to Dec. 2013, and more than 1,000 EVs in the first quarter of 2014. The subsidy includes payment for the 2013 year-end subsidy and advance subsidy payment for the first quarter of 2014.

The city of Hangzhou, where Kandi first launched its short-term EV rental program, is expected to announce a local subsidy policy for new energy vehicles soon, according to the company.

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TheStreet Ratings team rates KANDI TECHNOLOGIES GROUP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate KANDI TECHNOLOGIES GROUP (KNDI) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • KNDI's very impressive revenue growth greatly exceeded the industry average of 21.8%. Since the same quarter one year prior, revenues leaped by 174.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, KNDI's share price has jumped by 164.60%, exceeding the performance of the broader market during that same time frame. Although KNDI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • KANDI TECHNOLOGIES GROUP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, KANDI TECHNOLOGIES GROUP swung to a loss, reporting -$0.57 versus $0.20 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 729.7% when compared to the same quarter one year ago, falling from $2.24 million to -$14.09 million.
  • You can view the full analysis from the report here: KNDI Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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