TOYO Co., Ltd. (TOYO): A Bull Case Theory

We came across a bullish thesis on TOYO Co., Ltd. (TOYO) on Value Investing Subreddit Page by Swim-hole. In this article, we will summarize the bulls’ thesis on TOYO. TOYO Co., Ltd. (TOYO)’s share was trading at $4.31 as of Nov 27^th. TOYO’s trailing P/E was 6.09 according to Yahoo Finance.

TOYO Co., Ltd., a Japanese company founded in 2022, operates across multiple stages of the solar power supply chain, including producing wafer, silicon, solar cells, and photovoltaic (PV) modules. The company went public in July 2024 through a SPAC merger with BWAQ, initially experiencing a drop in stock price from its SPAC price of $10 to a low of $1.36, which is typical for recent SPAC listings. However, TOYO’s stock has since rebounded to $5.41 as investors have begun to recognize the company’s growth potential and value.

The company’s recent news includes securing a $150 million contract to supply solar cells to manufacturers in India and Texas, expected to contribute significant revenue in 2025 and 2026. This contract led to an 81% jump in TOYO’s stock price. For 2023, TOYO reported revenues of $62.3 million and a profit of $12 million, yielding a 19% profit margin. Despite the stock’s recent surge, the company’s market cap remains around $240 million, though it is likely to settle closer to $200 million in the coming weeks after the price pullback from its recent gain.

Looking ahead, TOYO’s 2025 financials are expected to reflect significant growth, with estimated revenues reaching $143 million, including the $75 million from the new contract. This would result in an income of $27 million, giving the company a future P/E ratio of 8.9. With a high-growth trajectory driven by new contracts, TOYO presents a compelling investment opportunity, though it’s advised to wait for a price pullback before entering. TOYO’s lower valuation and strong growth potential make it an attractive stock to watch compared to its competitors.

TOYO Co., Ltd. (TOYO) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held TOYO at the end of the third quarter which was 0 in the previous quarter. While we acknowledge the risk and potential of TOYO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TOYO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.