Fisker stock is down more than 30% ahead of the launch of its first electric vehicle; Is it time to buy? (FSR)
Fisker (NYSE: FSR) the stock has lost a third of its value since the start of the year, carried away by a wider sale of shares of electric vehicle manufacturers. But with the launch of its first vehicle fast approaching, is it time to buy?
Ready to launch
Shares of the Manhattan Beach, Calif.-based automaker have fallen 33% year-to-date. By comparison, shares of industry leader Tesla (NASDAQ: TSLA) fell by 28% during this period. Meanwhile, other competitors have seen even bigger drops. Lucid (NASDAQ:LCID) decreased by 37%, Nio (NYSE: NIO) fell 35%, and Rivian (NASDAQ: RIVN) dropped 45%
At the same time, the S&P 500 index has fallen 11% since the start of the year. Fisker shares recently changed hands at $10.50 late Thursday morning.
The sale of FSR happened before two major catalysts loomed on the horizon.
The first is the delivery of its first vehicle, the highly anticipated Fisker Ocean. The SUV, which will have a starting price of $37,499, is the brainchild of renowned automotive designer Henrik Fisker, who is also chairman and CEO of Fisker. Deliveries are expected to begin in November 2022.
The second is the rollout of its second model, a more economical electric vehicle called PEAR. PEAR deliveries are expected to begin in late 2024, with production starting at 250K per year. The vehicle is expected to have a list price of just under $30,000, significantly lower than most other EVs on the market.
It should be noted that Fisker is currently operating in the red, reporting a net loss of $471 million in 2021 on revenue of $106,000. The company released its year-end earnings report on February 16.
Is FSR a buy?
Analysts at Cowen, who rate Fisker as an outperformer with a price target of $28, said in a note last week that they expect PEAR production to hit 1 million per year after 2025. They added that the company is taking bookings for PEAR earlier than expected and that Ocean has generated considerable interest among buyers from commercial fleets such as car rental companies.
Cowen analysts also said they were impressed with Fisker’s recently announced warranty program, which warrants the powertrain for six years and 60,000 miles and the battery for 10 years and 100,000 miles. “We view this as an ambitious warranty plan that highlights management’s confidence in the design and durability of the product,” the analysts wrote in their note.
Credit Suisse analysts were more optimistic.
“Following a sharp decline in growth-oriented stocks, we believe FSR has oversold and see an attractive entry point as our broader thesis on FSR remains intact,” Credit Suisse analysts wrote in their statement. note last week. “We believe the start of production of Ocean in November is a key catalyst and could be enough to drive the stock up significantly.”
Credit Suisse analysts maintained their outperform rating on the stock but lowered their price target to $25 from $32.
Analysts at Raymond James, meanwhile, ranked FSR as a market performer, citing uncertainty over which Ocean model customers will prefer, given the wide price and gross margin range between models. They noted that the base Ocean Sport model should be priced at $37,499, with the midrange Ocean Ultra at $49,999 and the Ocean Extreme at $68,999. Models also vary greatly in drive range.
“To put it simply, if everyone wants Sport, the Ocean will probably never be profitable. On the other hand, if everyone is willing to splurge on Extreme, the company will have one of the best margin profiles in the automotive industry,” Raymond James analysts said in a note last week. . “Reality, of course, will be somewhere in the middle.”
Analysts rate Fisker a buy, on average. Of the 12 analysts tracked by SA over the past 90 days, four rated the stock a strong buy, three a buy, four a hold and one a sell. SA contributors also rated the stock as a buy, on average.
Meanwhile, Fisker’s SA Quant rating is a sell. While the company scored an A for growth, it received a D+ for momentum and D- for valuation and profitability.
For a more bullish view of Fisker, check out “Fisker Stock Forecast: What to Watch in 2022” by SA contributor Vince Martin. For a more bearish version, read “A First Take on Fisker” from the Insiders Forum.