Quantumscape Corp (NYSE: QS) has entered the headlines on Wallstreet this week after the company announced a signing with a new automaker partner. This partnership marks the companies second top 10 global automaker that has agreed to partner with QuantumScape, the other Volkswagon. The stock jumped 15% after the regulatory filing was released, giving shareholders some relief after a 6 month downtrend. With investors now intrigued as to what QuantumScape may have to offer, this article will breakdown the QS stock forecast over the coming years.
What’s in the pipeline for QuantumScape?
Firstly, it is important to note QuantumScape will not surpass its pre-revenue phase until 2024 based on current timelines provided by the company. QuantumScape first went public via a reverse merger with Kensington Capital Acquisition Corp. Additionally, the merger raised $680 million in funding which will provide the company the capital needed to expand and commercialise its innovative battery technology.
“This transaction allows QuantumScape to fund development and commercialization of our OEM-validated battery technology as we look forward to playing our part in the electrification of the automotive powertrain, helping transform one of the world’s largest industries and fostering a cleaner future for all.”Jagdeep Singh, Founder and Chief Executive Officer of QuantumScape.
JP Morgan sets $35 price target valuation
JPMorgan analyst Jose Asumendi initiated coverage on QuantumScape stock with a $35 price target valuation. Asumendi noted that QuantemScape’s solid-state battery prototypes will play a vital role in the development of global solid-state battery technology. This technology will only stand to benefit Volkswagen’s internal battery strategy if successful.
The analyst remains Neutral on QS stock however highlighted the upside potential of “potentially disrupting the electric battery market and accelerating mass adoption of electric vehicle” according to theFly. Jose Asumendi’s target currently represents a 29% upside from the current QS stock trading price.
Revenue Forecast for QuantumScape over the next 5 years
As we mentioned earlier, the current financial positioning of the company is still its pre-revenue phase. The company does not expect to commence manufacturing solid state batteries until 2024. The company reportedly expects revenue to grow from $39 million in 2025 to $275 million in 2026.
This forecasted revenue growth highlights the attractive dividends on offer as a result of the successful development of a solid state battery in the EV market. This outlook is speculative as a lot can happen within a 4 year time period of no revenue. However, Volkswagen has confidence in QuantemScapes technology. The company expects to develop a solid state battery manufacturing line by 2025.
“Volkswagen has become the largest shareholder of QuantumScape. Our US$100 million investment is a key building block in the Group’s battery strategy. One of the long-term targets is to establish a production line for solid-state batteries by 2025.”
What are the risks associated with the QuantumScape stock forecast?
Evidently, the companies stock price has remained extremely volatile as investors struggle to correctly price the market value. Furthermore, the large swings in investor momentum cement doubt in investors minds which has weakened the stocks sentiment.
It is clear that the imminent threat will be the loss of investor confidence over the period the company continues to develop its technology (pre-revenue phase). This will test many of the long term shareholders however will also provide them greater opportunity for entry.
The Bottom Line – QS Stock Forecast 2025
Overall, QuantumScape’s recent filing highlighting a new partnership with a top 10 automaker has rekindled QS stock’s sentiment on Wallstreet. Furthermore, the long term outlook for QS stock forecast illustrates the lucrative potential of a solid state battery development in the EV field. However, investors should be aware that the company is still a few years away from achieving commercialisation. Therefore, we can expect further volatility in the future as investors weigh up the risks and rewards in relation to the QS Stock Forecast.
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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