To stock traders, California-headquartered Romeo Power (NYSE:RMO) might look like a flash in the pan. That’s because RMO stock was the flavor of the month in December, only to lose investors’ interest in January.

Actually, I should clarify that it wasn’t actually RMO stock last year. The stock traded under the ticker symbol RMG until Dec. 30, when Romeo Power finalized its merger with special purpose acquisition company (SPAC) RMG Acquisition.

Don’t bother looking for RMG Acquisition anymore as the shell company is gone now, and RMO stock has replaced RMG on the New York Stock Exchange. And with that, another electric vehicle company has been brought to the public for trading.

Now that the initial hype and fervor surrounding the SPAC has faded, investors must weigh Romeo Power on its own merits. So, is there enough gas left in the tank to get RMO stock back on track?

A Closer Look at RMO Stock

In the early phases, SPAC stocks have a tendency to stay close to the $10 level. That was certainly the case with RMO when it was trading as RMG stock last year.

Many months passed as the stock basically went nowhere. Yet, patient investors were finally rewarded in November, when the shares suddenly rocketed to $17.75.

Plus, that wasn’t even the end of the wild ride. The bulls charged ahead in December, propelling the stock (still listed as RMG at that point) all the way up to a 52-week high of $32.73 on Dec. 24.

Switching over from RMG to RMO on Dec. 30 stock didn’t seem to help the bulls very much, however. Unfortunately, a steep share-price decline commenced and continued into January.

Now RMO stock was trading at $18 and change, far from the December peak. Whether that’s a good value or just a value trap depends on whether you believe in the company, so let’s delve into that now.

Big Company, Big Facility

So, Romeo Power is in the business of electrifying the global commercial vehicle market. The company achieves this by developing and manufacturing lithium-ion battery modules and packs.

It’s a pretty good business to be in as the total addressable market for commercial vehicles is, according to Romeo Power, estimated to be around $665 billion, with approximately $225 billion of that being in North America and Europe.

Romeo Power is already setting out to take a sizable share of that market. The company estimates that its customer base represents nearly 70% of North America’s Class 8 commercial vehicle market.

Moreover, through a variety of agreements with its customers, Romeo claims to account for over $300 million worth of currently contracted revenues.

To fulfill its orders, Romeo Power has a vast 113,000-square-foot manufacturing facility in Los Angeles. Now, there’s something you couldn’t say about rival battery maker Quantumscape (NYSE:QS).

An Electrifying Partnership

And while we’re at it, here’s something else you can’t say about Quantumscape. Namely, Romeo Power is partnering with environmental and recycling services leader Heritage Environmental Services to execute the latter company’s fleet electrification strategy.

Together, the two companies will identify commercial battery electric vehicle value chain participants to participate in the program.

This is huge for Romeo Power. Heritage and its affiliates intend to purchase 500 battery electric vehicles for fleet implementation between 2022 and 2025.

That number will likely expand quickly as the ultimate goal is to electrify up to 2,000 trucks over time. Partners for the program will be selected during 2021’s first quarter, and Heritage is expected to start taking vehicle deliveries in 2022.

Naturally, Romeo Power CEO Lionel Selwood, Jr., is more than happy to pursue this value-added partnership with Heritage. “[W]e look forward to leveraging our battery expertise to identify the optimal partners for all aspects of their electrification initiatives,” commented Selwood.

The Bottom Line

My purpose here isn’t to bash Quantumscape. I like that company too, sometimes.

Rather, I’m just trying to offer up an ambitious competitor for your consideration. Romeo Power fits that description. So, if you like the company’s stats and appreciate the value of the Heritage collaboration, feel free to consider a long position in RMO stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.