Workhorse Group Inc (NASDAQ: WKHS) is set to release Q2 Earnings on Monday morning before market open. The US electric vehicle manufacturer operates in both the automotive and aviation industry. WKHS is most commonly known for it’s innovative spin on pick-up trucks and transport vans. Since July, WKHS has seen an enormous surge in investor interest as the stock value increased 528.13% over the past two months. With Q2 earnings around the corner, let’s breakdown what to expect.
Table of Contents 1. Introduction 2. WKHS Q2 Earnings and what to expect 3. The future for WKHS investors
Workhorse Q2 Earnings Expectations
Q2 Earnings are set to be released on Monday, 10th of August at 10AM ET. Investors can find all the conference call details here. The Q1 performance of WKHS impressed investors, beating it’s expected value by $0.13 or a 135% surprise value. The expected value for this quarter remains negative, at -$0.12. The first quarter report of 2020 suggested further growth through the fiscal year as they have continued operations throughout the initial COVID-19 outbreak.
“In the first quarter we completed several major roadmap objectives which have us well-positioned to execute on our production timeline as well as improve our long-term corporate governance and competitive positioning”Workhorse CEO Duane Hughes.
However, Earning predictions look bleak with quarterly forecasts averaging -$0.13 for the remainder of this year. The reality from an investor standpoint, is that most smaller EV companies won’t produce enticing earnings results. The sheer costs of R&D and expansion is where the risk reward factor comes into play.
Furthermore, it is worthy to take note Q1 Earnings had absorbed increased R&D costs of $500,000 USD to finalise their C series model. Since then, WKHS has partnered with leasing company Ryder (NYSE:R) to begin leasing the Workhorse C-1000 vehicles on Ryders COOP platform. RYDER COOP is “a peer-to-peer truck sharing platform, connecting fleet managers to businesses that are looking to rent vehicles”. This is great news for long term shareholders, as it provides WKHS with another sufficient stream of revenue. This will also offer WKHS the exposure to many fleet services and related businesses, ultimately giving WHKS the platform for exposure.
The future for Workhorse investors
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.
The EV industry is dynamically evolving around us, with the industry leader Tesla paving the way for EV manufacturers. From what recent history has taught us, the EV industry will continue to have Bears prepared to short these companies. After watching Tesla closely over the past year, there have been countless conversations suggesting Tesla would collapse. From that perspective I agree that the EV industry will remain unprofitable for the next 5-10 years. However, this is not to say investors couldn’t potentially profit off these companies sooner.
The companies future will come down to how fast they can cement themselves into a niche of the EV industry. With automotive giants like Mercedes and Ford moving towards the EV market, Workhorse and Nikola must concrete loyalty into the consumer market. The advantage WKHS has over companies such as Mercedes, is that they are already 5-10 years ahead in the manufacturing and R&D process. This leaves the challenge to WKHS executive management. They must build a strong reputation as we move into the EV age of automotives.
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.