Should you buy Workhorse stock? (July 2023)
- 8 months ago
Workhorse stock analysis. WKHS
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In 2021, Workhorse stock soared to over $40 a share on optimism that it would win a $6 billion dollar contract with the United States Postal Service.
However, the manufacturer of electric trucks lost out to a company called OshKosh. As a result, the share price collapsed and today Workhorse has a valuation of 216 million dollars.
With 89 million of cash and investments and no debt, the enterprise value is only 127 million.
The issue is that electric vehicles are costly to make and Workhorse is nowhere near to making money. It produced only $7 million in revenue over the last 12 months while reporting a net loss of 120 million and negative free cash flow to the tune of 115 million.
The company burned through $38 million in the first quarter so with only 79 million of cash left Workhorse is dangerously close to bankruptcy. To survive, the company needs to raise more capital. But with a market cap below $300 million it’s hard to raise enough money without further tanking the stock.
The company did raise $19 million in Q1 but that just doesn’t seem enough when the company is losing almost double that. And this has been an incredibly unreliable company. It entered the EV market back in 2007 and between 2007 and 2019 it delivered only 365 vehicles. There were also allegations of fraud and insider trading.
#wkhsstock #stocks #investing
Join 9000+ investors: https://www.overlookedalpha.com
In 2021, Workhorse stock soared to over $40 a share on optimism that it would win a $6 billion dollar contract with the United States Postal Service.
However, the manufacturer of electric trucks lost out to a company called OshKosh. As a result, the share price collapsed and today Workhorse has a valuation of 216 million dollars.
With 89 million of cash and investments and no debt, the enterprise value is only 127 million.
The issue is that electric vehicles are costly to make and Workhorse is nowhere near to making money. It produced only $7 million in revenue over the last 12 months while reporting a net loss of 120 million and negative free cash flow to the tune of 115 million.
The company burned through $38 million in the first quarter so with only 79 million of cash left Workhorse is dangerously close to bankruptcy. To survive, the company needs to raise more capital. But with a market cap below $300 million it’s hard to raise enough money without further tanking the stock.
The company did raise $19 million in Q1 but that just doesn’t seem enough when the company is losing almost double that. And this has been an incredibly unreliable company. It entered the EV market back in 2007 and between 2007 and 2019 it delivered only 365 vehicles. There were also allegations of fraud and insider trading.
#wkhsstock #stocks #investing