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Is Index Stock Ideanomics A Good Investment?

Is Index Stock Ideanomics A Good Investment?

The New York-based company works two divisions: Ideanomics Mobility and Ideanomics Capital. 

The mobility department acts as a service provider to the auto sector, helping facilitate the adoption of commercial operators via procurement, finance, and leasing, or as energy management solutions. 

Ideanomics Capital focuses on disruptive fintech solutions for the financial services industry.

Combining the two divisions, Ideanomics can offer customers and partners worldwide technologies and services created to expand transparency, efficiency, and accountability and offer shareholders the opportunity to participate in high-potential growth industries.

The company’s leadership team is made up of professionals from the auto industry, including executives from GM (GM) and Tesla (TSLA). 

What does Ideanomics do? 

Ideanomics’ synergistic ecosystem spans three critical pillars of EV: vehicles, charging, and energy. 

Shane McMahon, executive chairman of Ideanomics, told Capital.com that “the firm’s strategy is to cut the total cost of ownership for fleet operators while improving their efficiencies and enhancing the overall value chain through the Ideanomics’ ecosystem.”

New offerings leveraging the company’s capital division will help commercial operators shift investments from a capital expenditure (CAPEX) to an operating expenses (OPEX) model, removing barriers to entry into the EV industry.

Ideanomics’ Charging-as-a-Service and Vehicle-as-a-Service offerings aim to change the industry’s financial paradigm and expand opportunities across the EV sector.

Risks Factors

Ideanomics currently has a debt of approximately $9 million, with around $8.5 million of that being long-term debt and the remaining short-term debts. 

This is not a tremendous problem in the future but should be monitored going forward as always. The company has done well in acquiring new brands without racking up substantial debt along the way, and this should be beneficial going forward for years to come.

Based upon historical data and when looking at the charts of the Ideanomics’ stock, it becomes apparent that there is a relatively strong line of support around the $1 mark looking back at 2nd half 2020 lows. 

This would indicate as much as 50% downside risk going forward, barring further macroeconomic headwinds.

Overall Investment Summary

With a potential upside of as much as 200% in an approximately 1.5-2.5-year time frame due to enhanced value following the pullback, ongoing EV momentum, and accelerated growth, Ideanomics looks to be a solid investment in the future. 

In my opinion, there is still around 50% downside risk, and this should be taken into account when weighing risk-reward strategies. Strong earnings growth has shown the company has a proven business model and now is as good a time as ever to get in early in the stock.

IDEX is positioned in a sector with favorable ESG prospects and should see considerable growth and support from government funding. 

We believe the business model of developing a portfolio of EV brands allows the companies to support one another, which is favorable in an industry with a steeper learning curve than most. 

This will also allow for a diversification that makes for a safer investment in a small-cap investment at current prices. Therefore, IDEX is an enticing high-risk, high reward, volatile long-term play for EV investors. 

Will IDEX Stock Go Up?

Multiple factors are influencing the share price. In April 2021, Roth Capital gave IDEX a price target of $7, suggesting a potential upside to the stock. 

Before the share price can maintain steady gains, Vinod Jain, senior analyst at Aite-Novarica Group, said, “the company needs to have positive net income to break the current barrier price of $ 2.50″.

Note that analyst predictions can be wrong. Forecasts shouldn’t be used as a substitute for your research. Always conduct your due diligence before investing. And never invest or trade money you cannot afford to lose.

Is Ideanomics a Good Investment?

While conventional roadways lack supporting footing for the mass transit of electric vehicles, Vinod Jain, senior analyst at Aite-Novarica Group, said that demand is growing and the auto sector’s endgame is inevitable, despite a few concerns.

 “The Ideanomics’ product offering looks promising, but investors should consider the high infrastructure and capital costs,” he said.

There are still obstacles to growing the EV market, including outfitting infrastructure with EV-ready roads, which could pose risks to the stock. 

Note that analyst predictions can be wrong. 

Forecasts shouldn’t be used as a substitute for your research. Always conduct your due diligence before investing. And never invest or trade money you cannot afford to lose.