Workhorse stock forecast: What’s next for the beaten-down electric vehicle (EV) stock?
Struggling electric vehicle (EV) maker Workhorse Group (WKHS) has seen its stock price rise 42% over the last week and today (22 March) is priced at $4.43.
Sentiment has turned towards tech stocks with the Nasdaq Composite rising 8% in that time. With hydrocarbon fuel costs rising dramatically they may also make EV stocks look more attractive. Other EV stocks have risen in the same period for example Ideanomics (IDEX) is up 20%, Tesla (TSLA) is up 25% and Nikola (NKLA) has gained 38%.
And there is a hope perhaps that Workhorse has put the worst behind it and is looking positively to the future.
On the downside on 1 March Workhorse reported a net loss of $156m for the fourth quarter of 2021 after having reported profits of more than $280m in the same period the previous year.
Last year it lost out on a multi-billion-dollar contract from the US Postal Service and had to recall its C-1000 delivery van because it failed to meet safety standards. The company, which specialises in delivery vehicles for the "final mile" sector, has now said it will discontinue to C-1000 vehicle.
In the meantime it is reshaping its product roadmap including new releases: the W750 for the third quarter of 2022, the W56 scheduled for third quarter 2023 and the W34 for 2024.
It was also cheered by the earlier announcement of a multi-year supply agreement with the GreenPower Motor Company during which GreenPower will deliver 1,500 EV Star cab and chassis for the new Class 4 W750 step van line starting in July 2022.
Under the newly developed business plans, Workhorse said it expects to manufacture and sell at least 250 vehicles in 2022 "assuming current supply chain visibility remains unchanged, and generate at least $25 million in revenue".
What can we expect from Workhorse in the future, considering the low price at which the stock is trading? Join us in reviewing Workhorse’s share-price forecast below as we assess the price action and fundamentals of this EV manufacturer to suggest some plausible Workhorse stock projections.
Workhorse stock news
On 30 September this year, Workhorse announced that Steve Schrader, the company’s chief financial officer (CFO), and Rob Willison, its chief operating officer (COO), had left the company, and that new appointments had been made to replace them.
For the CFO position, the company appointed Greg Ackerson, the firm’s former corporate controller, while the management decided to eliminate the role of COO from its ranks.
Moreover, it also announced its appointment of multiple top officers, including the following:
Jim Harrington was appointed as chief administrative officer;
Josh Anderson was appointed as chief technology officer;
Jim Peters was appointed as vice president for purchasing and supply chain; and
Dave Bjerke was appointed as vice president for product development.
After the announcement, the stock has dropped nearly 14% as Wall Street has probably perceived this as a sign of instability in a business that still has much to prove.
It is important to note that Workhorse appointed Richard F Dauch as its CEO only a few months ago and these changes may have been made following his assessment of the state of the business.
Meanwhile, these changes come only a few days after the company announced it had decided to suspend the delivery of C-1000 vehicles while it recalled a total of 41 units, citing the need for further testing and modifications to existing vehicles to certify them under the Federal Motor Vehicle Safety Standards (FMVSS).
On 4 January it announced the appointment of a new chief financial officer, Robert Ginnan, with "20 plus years of senior finance and leadership experience". Interim CFO Greg Ackerson returns to his role as corporate controller and principal accounting officer.
WKHS fundamental analysis
Workhorse is an Ohio-based company that specialises in developing and manufacturing electric-powered vehicles, including aircraft and trucks. The firm is considered a pre-revenue start-up as its products (vehicles) are still prototypes.
The firm has produced negative operating results in the past five years at least and net losses have ranged from $19.5m–$37.1m from 2016–2019. In 2020, the company reported positive bottom-line results of $69.7m amid an unexpected windfall it received from its investment in LMC following a merger with DiamondPeak Holdings.
As a result of this operation, Workhorse received 16.5 million shares of the newly formed business that generated positive non-operating income to the company. This non-recurring income helped Workhorse in swinging to positive net earnings during this year.
Since this positive development resulted from a one-time event, its impact on the long-term Workhorse projected stock price might be limited.
Since Workhorse is a pre-revenue company, traditional valuation multiples cannot be applied to value the firm. Instead, most of the value of the company is concentrated on its technology and portfolio of patents.
Workhorse stock forecast
Based on an assessment of the firm’s price action, the short-term outlook for the stock is bearish unless the price breaks above its SMAs. As a result of the recent fluctuations, a falling wedge pattern has been formed. This is typically considered a bullish formation but it has not yet been confirmed.
On the other hand, the fundamentals of the company are fairly weak as Workhorse has not yet managed to launch a marketable product that can produce a steady stream of revenue for the business.
Moreover, the latest changes in the management team are concerning as it might take time for these newly appointed officers to get a hold of their roles.
Based on an algorithm-based Workhorse share price forecast at the time of writing (22 March) from Wallet Investor, it viewed the stock as an "outstanding" short term in investment and forecasted the WKHS stock may increase to $6.88 by this time next year.
Meanwhile, in the long term, a WKHS stock forecast from this same provider was pointing to a price of $16.6 for March 2027.
According to data compiled by Seeking Alpha, the consensus rating for Workhorse Group was buy three rated it a strong buy, another a buy, and four holds.
The consensus 12-month price target for the stock is standing at $6.75.
When looking at Workhorse stock forecasts, bear in mind that analysts’ predictions can often be wrong. Analyst projections are based on making a fundamental and technical study of the company’s performance. However, past performance never guarantees future results.
Do your own research, and always remember that your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you feel about losing money. Never invest more than you can afford to lose.
FAQs
Is Workhorse a good stock to buy?
When looking at Workhorse's positive stock forecasts it is important to bear in mind that analysts’ predictions can often be wrong.
Do your own research, understand your attitude to risk and your expertise in this market, the spread of your investment portfolio and how comfortable you feel about losing money. Never invest more than you can afford to lose.
Will Workhorse stock go up?
Nobody can predict with 100% accuracy what a stock’s price will do in the future. However, algorithm-based predictions from Wallet Investor see the price of Workhorse rising in 2022, 2023 and 2025.
What is the future of Workhorse stock?
That depends on a number of variables. It is essential for you to do your own research to form an opinion of a company’s performance and its likelihood of achieving analysts’ targets. Remember that markets are volatile and the stock’s past performance does not guarantee its future gains. And never invest more money than you can afford to lose.
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