Workhorse Group Inc (NASDAQ: WKHS) posted an impressive week of trading, gaining over 45%. The company designs and builds performance battery-electric vehicles and aircraft, along with cloud based, real-time telematics performance monitoring systems. Investors have rallied around the Ohio EV manufacturer, with a game changing $8.1 Billion contract from USPS on the horizon. Furthermore, with recent changes in the political environment such as the Moving Forward Act, investors are confident WKHS can land this deal of a lifetime. This article will breakdown everything you need to know about WKHS stock and the forecasts for 2022 and beyond.
Table of contents
What are analysts forecasting for Workhorse stock in 2021/22
Firstly, the general consensus across the board of analysts is Bullish on WKHS stock. Out of 8 Wallstreet analysts, 5 have listed a BUY rating on the stock. However, with the recent surge in the stock price the 12 month price targets suggest a downside. The average 12 month price target is $19.57, a downside of 42% from the current trading price. The following price targets are from analysts in the late half of 2020:
11/10/2020 Roth Capital lowered their price target of $27.00 to $19.00, this had a low impact on the share price. The lowered target suggests a downside of 45% from the current trading price.
11/16/2020 R. F. Lafferty initiated coverage of a buy rating with a price target of $29.00, this had low impact on the share price. This is the highest 12 month price target amongst analysts.
12/9/2020 Wolfe Research initiated coverage of a market perform rating with a price target of $24.00, this had low impact on the share price.
Financial forecasts in 2021 and beyond
Secondly, a key factor in EV growth is a positive revenue outlook. Majority of EV manufacturers are operating at a loss, meaning investors will look at growth prospects in revenue, improving vehicle margin and delivery growth.
Revenue forecasts for 2021 and beyond
- Revenue for Q1 2021 forecast – Estimates range between $4 Million to $17 Million, with an average of $12.3 Million in revenue for Q1 2021. This suggests a revenue growth of 133.9%
- Annual Revenue forecasts for 2021 – analysts predict the annual revenue to reach $138.6 Million on average, suggesting a YOY increase of 436%.
- The EPS is expected to turn positive in 2022
Whats in the pipeline for WKHS in 2021 and beyond?
The EV industry is dynamically evolving, with the Goliath industry leader Tesla paving the way for EV manufacturers. Workhorse or formally known as AMP Electric Vehicles, is an Electric transport vehicle manufacturer based in Ohio, USA. The company focuses on developing sustainable, innovative and cost effective transportation for businesses in the last mile industry. Led by CEO Duane Hughes, Workhorse has been able to deliver 3 key products that have captivated investor interest:
- C Series 650 and C Series 1000 – These two models of Electric Transport Vans have built-in lightweight bodies and a innovative suspension system. The C series aims to capitalise on the $18 Billion “Last Mile” industry by providing an efficient and cleaner alternative. The C Series gained a partnership with Ryder, via a peer to peer truck sharing platform that rents vehicles to delivery companies. Investors are confident this exposure on Ryder will initate further sales with large transportation corporations.
- The HorseFly UAV – Integrated with the C1000 series, the UAV Horsefly is designed to deliver packages via aviation of a drone. The Horsefly is specifically designed as a innovative and non-instrusive method of delivery. The HorseFly will drastically cut the associated cost of delivery, upwards of 80%.
- Metron – The Metron is designed to track and monitor all Workhorse vechiles operating under an organisation. The software collects data from all trips completed by Workhorse vechiles and maps out faster and more efficient routes.
We remind our viewers that this is not financial advice. Instead, the information above is an investment commentary from extensive research.
In conclusion, the revenue forecasts alongside the potential United States Postal Service award are something long term investors are very bullish on. Furthermore, the C series vehicle has the potential to absorb market share in the “last mile” industry. However, the price targets from analysts remain conservative at this point. Therefore, downside risk calculated by analysts should always be incorporated into a risk strategy for this stock.
Written by Tyger Fitzpatrick, Founder of Youth Investment Group.
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.