Why is the Workhorse stock up 50% – will they surge like Nikola?

First, it was Nikola (NASDAQ: NKLA), then INO (NASDAQ: INO), and now it is the Workhouse stock (NASDAQ: WKHS) that is exploding. It seems the electric vehicle spider web is starting to slowly reveal a clearer picture of who are the prominent businesses besides Tesla (NASDAQ:TSLA). After rising 50% in a week investors wonder whether now is time to board the WKHS train?


Table of contents 
1. Analyst upgrades cause a WKHS rally 
2. Will the bullish trend behind Workhorse last? 
3. Is WKHS a viable investment?

Bullish Hedgefund creates a WKHS frenzy

The positive sentiment behind Workhouse began to rise. However, the recent outlook upgrades from Formidable Asset Management LLC (‘Formidable’) and analyst Gregory Lewis are causing the raging bulls to multiply.

Formidable firmly believe that WKHS is trading at a significant discount to its intrinsic value. The hedgefund supports their valuation as they believe the “client roster, potentially strategic partnerships, and valuable intellectual property“,  will mark the upward surge of the Workhorse stock price. It seems reputable partnerships with United Parcel Service, DHL Worldwide Express, FedEx, and Ryder system is aiding the creation of an optimistic future. Mainly, as Formidable believe WKHS’s partnerships have given the companies technology and products a “key stamp of approval”.

The bulls were given an extra dose of steroids when analyst Gregory Lewis raised his WKHS price target from $5 to $10. Lewis’ increased his buy rating because of the approaching U.S government contract on the shipping of Workhorses midsize C-series electric vehicle vans. The green light from the US, should in the eyes of Lewis, “springboard” an increase in more shipment orders once the first fleet are complete. Thus, Gregory Lewis expects WKHS’s future revenue to soar  and naturally raised his price target.

Is the Workhorse stock immune to COVID-19?

The bulls are rallying behind WKHS at an unstoppable speed, causing a 130+% increase in the past month. However, is the trend here to stay? A slight correction is due. Especially as Workhouse’s stock growth is elevator like on the six month chart. However, if the analyst ratings stay bullish and the US government contract comes to fruition the underlying rally should not fade (opinion not advice). Also, it seems the Electric Vehicle market is working in unison. If one company such as Tesla (NASDAQ: TSLA) is up all other companies tend to follow suit. Thus, as long as the Electric Vehicle market’s optimism is not interrupted by the recessionary climate, bulls behind WKHS should press on. (opinion not advice)


Should you invest in the Workhorse stock?

Before I start, I am obliged to remind our viewers that this is not advice, only general commentary from my extensive research into this area. 

Short answer:  WKHS is a promising long-term investment (opinion not advice). 

Speculation is sometimes referred to as the mother of evil. However, in the case of WKHS, speculation is the mother of all good. The average investor, hedge funds, and the US government are optimistic about the future of WKHS (opinion not advice). WKHS’s growth prospects should continue on this upward trajectory in for the coming years. (opinion not advice) Also, the recent surge in the Electric Vehicle industry is benefiting quite a few companies. Ultimately allowing long-term investors to cement their position in the stock. There might be sell-offs along the future time line. However, the sell-offs should expose the true areas of support in Workhouse.

If I were investing in Workhouse I would take a long-term approach based on the upside potential. (opinion not advice) Considering the turbulent times I would look to top up if a downturn presented itself.

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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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Written by Patrick McLoughlin, Senior Manager of YIG.

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