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QuantumScape stock forecast: Where next for battery maker?

By Rob Griffin

Edited by Jekaterina Drozdovica

17:26, 21 January 2022

May 27, 2021, Brazil. In this photo illustration the QuantumScape logo seen displayed on a smartphone screen
QuantumScape stock forecast: Where next for battery maker? – Photo: Shutterstock

QuantumScape (QS) is involved in the development of next-generation solid-state lithium-metal batteries for electric vehicles. The company, which is based in San Jose, California, United States, has declared it’s on a mission to revolutionise energy storage to enable a sustainable future.

However, it’s reportedly facing legal tussles, while the stock price has endured an extraordinarily volatile ride since going public in November 2020. 

We take a look at the company’s prospects and place in the fast-developing world of electric vehicles as well as other factors shaping a QS stock forecast.

QUANTUMSCAPE STOCK PRICE FORECAST

QuantumScape stock analysis

You may not be familiar with this company unless you’ve been following developments within the electric vehicle world over the last few years.

QuantumScape was founded in 2010 and went public on 25 November, 2020 through a merger with Kensington Capital Acquisition, a special purpose acquisition company (SPAC).

The company says it’s built a technology that enables the fast charging, long-lasting and safer batteries required to power zero-emissions transportation.

QuantumScape has outlined three key reasons for people to invest in its stock: 

  • once-in-a-century shift to electrified vehicles is unfolding

  • solid-state batteries are the key to making this shift

  • QuantumScape has the only lithium-metal solid-state battery with automotive OEM validation.

QuantumScape stock, RSI indicator, 2020 - 2022

It’s fair to say that QS stock has given investors an extremely volatile ride since the company went public in November 2020.

Despite initially rocketing 173% to $114.77 on 24 December 2020, it then went into a steady decline. By August 2021 the stock had fallen 83% to $19.61.

Over the past six months, the stock rose from $23.61 in late July to $40.58 by mid-November. It has since fallen away again, with a 56% fall taking it down to $17.92, at the close on 19 January 2022.

In terms of QS stock technical analysis, a relative strength index (RSI) reading of 27.83 suggests the stock has moved into oversold or undervalued territory. 

Latest results

As far as recent results are concerned, the company revealed total operating expenses of $53.83m for the three months ended 30 September 2021. This figure was more than double the $20.69m expenses recorded for the same period in 2020.

In the letter to shareholders, QuantumScape stated that it expects cash operating expenses for 2021 to be between $130m and $160m.

“Working with our equipment suppliers, we now have a better line of sight on how we will finish the year. We anticipate capex will be in the range of $135m to $165m,” it stated.

The company also reiterated its guidance of more than $1.3bn in liquidity at year end. 

“This strong cash position provides us the flexibility to efficiently allocate resources as we work to commercialise our solid-state lithium-metal technology,” it added.

Legal challenges

It has also reportedly been facing legal challenges from shareholders who have questioned the quality of its batteries and the tests it used to measure performance.

According to filings, this case has been brought in the United States District Court, Northern District of California. 

Strategic vision

QuantumScape’s board of directors has a series of targets to meet over the coming decade. 

These included the cumulative delivery of one terawatt-hour of battery cells, equivalent to the annual production of more than 20 factories the size of the gigafactory outside Reno, Nevada. 

“While these goals are certainly extraordinary in scale, we believe that they are, in fact, possible, and our longer-term ambitions beyond 2030 are to continue to grow our share in what we expect to be a multi-decade growth market for [electric vehicle] EV adoption,” stated the letter to shareholders.

While it acknowledged there was much work to do, it emphasised that “extraordinary opportunity demands extraordinary ambition” and said it was focused on making ambitions a reality.

“We believe that the once-in-a-generation shift to electric vehicles, combined with QuantumScape’s transformative lithium-metal battery technology, represents a truly extraordinary opportunity for decarbonisation as well as shareholder value creation,” said the company.

EV industry’s potential

There were 10 million electric cars on the world’s roads at the end of 2020, following a decade of rapid growth, according to the International Energy Agency (IEA) in its Global EV Outlook 2021 report.

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“Electric car registrations increased by 41% in 2020, despite the pandemic-related worldwide downturn in car sales in which global car sales dropped 16%,” said the IEA..

The study also insisted the near-term outlook for EV sales was bright. 

Global electric passenger car stock, 2010-2020

Electric car sales rising

“In the first quarter of 2021, global electric car sales rose by around 140% compared to the same period in 2020, driven by sales in China of around 500,000 vehicles and in Europe of around 450,000,” said the IEA. “US sales more than doubled relative to the first quarter of 2020, albeit from a much lower base.”

The report also pointed out that existing policies around the world suggested healthy growth over the next decade with stock reaching 145 million in 2030 – 7% of the road vehicle fleet.

“EV markets could be significantly larger if governments accelerate efforts to reach climate goals,” added the IEA. 

“In the Sustainable Development Scenario, the global EV fleet reaches 230 million vehicles in 2030 (excluding two/three-wheelers), a stock share of 12%.”

QuantumScape stock forecast 2022-2025

Analysts predicted the price to grow in the next 12 months, with the consensus price target of $42.67 according to the five analyst views compiled by MarketBeat. QuantumScape stock price predictions vary from a low of $25 to the high of $57. 

The stock has a consensus recommendation of hold, with one analyst rating it as a buy and four rating is as a hold.

CHART

In November 2021,  JPMorgan boosted its QuantumScape projections from $36 to $40 and Morgan Stanley reiterated the equal weight recommendation. Earlier in 2021, Goldman Sachs initiated coverage giving the QS stock prediction of $42 and a neutral rating. 

QuantumScape stock analyst price targets and ratings, 2021-2022

According to the algorithmic forecasting of Wallet Investor, the stock is a “bad long-term (one year) investment” that is forecast to fall to $10.93 over the next 12 months. The site predicted the stock to fall to $8.898 at the start of 2023, yet then decline significantly to $0.340.

In 2025, the price is predicted to continue falling below to scanty levels of  $0.000001.

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

Analyst views on QuantumSpace

According to Danni Hewson, financial analyst at AJ Bell, green technology and electric vehicles are right at the top of the list when it comes to growth areas for 2022.

“Consumers are rapidly being won over and the big automakers are jostling for position on the field, which has so far been dominated by new kid, Tesla,” she told Capital.com.

Of course, there are going to be problems along the way when a new area is developing – and some of these are already causing issues.

“Ask anyone what the biggest impediment getting in the way of them swapping their combustion engine for an electric model and there’s a good chance they’ll say price or range or both,” she added. 

“Well, QuantumScape might just be one of the companies that plays a crucial role in changing that conversation.” - Danni Hewson, analyst at AJ Bell

Hewson also highlighted that it’s been working with Volkswagen and “another undisclosed auto big boy” on developing the next generation of batteries to provide more power for less.

“It sounds spectacularly exciting if it works,” she said. “The company’s share price has been volatile to say the very least over the last year and a lot of that is down to the fact that they’ve yet to unveil a prototype.”

However, the reluctance of investors to get involved until they see something more tangible presents an opportunity for those with more faith.

“With shares down a whopping 73% in 2021 and still languishing below its IPO price, there is clearly room for improvement if the next couple of years go well,” said Hewson. 

“Its target for commercial production is 2024. If it makes that target and beats its rivals, today’s price will seem laughable.”

FAQs

Is QuantumScape (QS) a good stock to buy?

This depends on your own investment objectives and the research you have carried out on the stock. Remember, it’s very important to form your own opinion of a company’s prospects and its likelihood of achieving analysts’ targets.

Will QuantumScape stock go up or down?

Analysts predicted the price to grow in the next 12 months, with the consensus price target of $42.67 according to the five analyst views compiled by MarketBeat. QuantumScape stock price predictions vary from a low of $25 to the high of $57. 

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

Markets in this article

QS
QuantumScape Corporation
8.13 USD
0.22 +2.810%

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