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After Ayro (NASDAQ:AYRO) announced a promising partnership and unveiled a new electric vehicle (EV) that I believe has a great deal of potential, the outlook of AYRO stock continues to be very favorable.

Source: Alexandru Nika / Shutterstock.com

Further, certain aspects of Ayro’s recent sales of its new shares bode well for its stock price.

Another High-Potential Partnership

On Mar. 17, Ayro announced a deal with Element Fleet Management. Ayro described Element Fleet Management as “the world’s largest pure-play automotive fleet manager,” with “1 million vehicles under management across 5 countries and…over 5,500 loyal, world-class clients.”

As a result of the agreement, auto fleets will be able to easily simultaneously buy Ayro’s EVs and benefit from Element’s consulting services. Element helps fleets finance and acquire vehicles, as well as save money, enhance “driver safety,” and lower their “environmental impact,” according to Ayro.

This partnership is meaningfully positive for Ayro and AYRO stock for two reasons. First, the deal suggests that Element — which is obviously a major player in the fleet-management sector — believes that offering Ayro’s EVs in conjunction with its services will make its offerings more attractive to some fleet managers.  That belief, in turn, implies that some fleet managers need and/or want Ayro’s EVs.

Secondly, Element will likely offer Ayro’s EVs to hundreds of its new and existing clients, some of which will buy the automaker’s vehicles. Consequently, the deal is likely to meaningfully boost Ayro’s top and bottom lines, lifting AYRO stock in the process.

A Promising New EV

On Mar. 8, Ayro unveiled a new EV called the “Electric Vaccine Vehicle (EVV).” The company said that the EV was made “to mobilize a flexible, safe and efficient means of delivering vaccines and testing to millions of people in 2021 and beyond.” The vehicle has been “optimized to store, transport, and deliver testing and vaccines,” Ayro added.

In addition to enabling the delivery of Covid-19 vaccines and tests, Ayro’s EVV will eventually be used as a means to provide many on-site medical services to patients. For example, the vehicle could be used to provide kidney dialysis and blood transfusions to patients outside their homes. Using the EV in such a way would enable hospitals to reduce overcrowding and allow clinics to acquire more patients by making themselves much more convenient than competing facilities.

Attractive Aspects of Two Stock Sales

In December, another InvestorPlace columnist, Mark Hake, noted that, as part of its sale of new stock, Ayro had “issued warrants” to buyers of its new shares. And investors were given six months, i,.e. until May 22, to purchase AYRO stock for %$8.09. Hake points out that, “Therefore it would only make sense to exercise these warrants if AYRO stock were higher than $8.09 before May 22. So, in effect, AYRO needs to get AYRO stock well above that price.”

As a result, if the company’s share price does not climb high above $8.09 by May 22, Ayro will lose $10 million that it would have received if the options had been exercised, explained Hake.

However, in February, after Hake’s column was published, Ayro’s stock price did climb as high as $11.40.  As a result, many if not most of the warrants have likely already been exercised.

But in all likelihood, a meaningful number of warrant holders likely held onto at least some of their warrants, in the hope that the share price would climb much higher than $11.40 before May 22.  Given this situation, the EV maker still likely has a strong incentive to boost its share price between now and May 22.

More impressively, on Feb. 11, Ayro announced that it had sold 4.4 million shares of its stock to “several institutional and accredited investors” for $9.50 per shares. The sale generated total proceeds of  $41.8 million.

Quite simply, the fact that large investors bought nearly $42 million of Ayro stock for $9.50 per share strongly suggests they believe that the shares will climb well above $9.50. In other words, the “smart money” is pretty sure that Ayro stock will ultimately rise much higher than its current level of  $6.90.

The Bottom Line on AYRO Stock

Ayro has launched a high-potential EV and announced a very promising new partnership. Meanwhile, the company is likely incentivized to raise its stock price in the next two months and the “smart money” is bullish on AYRO stock. Given these points, I remain very bullish on the shares.

On the date of publication, Larry Ramer held a long position in Ayro.  

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been Roku, GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.