QS stock forecast

QS Stock Forecast: QuantumScape Stock Recharges After a 32% Decline

Quantumscape (NYSE: QS) Stock rebounded on Wednesday as the wider Tech market bounced back from heavy losses suffered in 2022 so far. QuantumScape is currently developing solid-state lithium metal batteries for electric vehicles, breaking into a $300 Billion market over the coming years. With investors intrigued as to what QuantumScape may have to offer, this article will breakdown the QS stock forecast.

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.
QS stock forecast
QuantumScape sign, logo at headquarters of an American company that produces solid state lithium metal batteries for electric cars – San Jose, California, USA – 2020

QS Stock Forecast: JP Morgan sees $300 Billion Market Opportunity

The most recent coverage on Wallstreet comes from UBS analyst Chris Snyder. The analyst initiated coverage of QuantumScape with a Neutral rating and $18 price target. The analyst is bullish on QuantumScapes leading position in solid-state battery technology market. Snyder sees QuantumScape disrupting a $300B market as well as its auto OEM relationships, though he is still awaiting QuantumScape’s checkpoints on commercialization.

QS Stock Forecast: Revenue Outlook

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.”

– Herbert Diess, Volkswagen AG CEO

What are the risks associated with the QS 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.

QS Stock Forecast: The Bottom Line

Overall, 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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