Will Quantumscape bounce back in 2021?

Quantumscape Corp (NYSE: QS) has entered headlines on Wallstreet over the past three weeks after the stock tumbled 57%. The stock went into free fall over the New Year period before finding a new equilibrium at $56.79 a share. Following the sharp decline, CEO Jagdeep Singh affirmed his confidence that the volatility was related solely on supply and demand factors and not a concern for the business. This article will breakdown the questions surrounding QuantumScape and if the stock can bounce back in 2021.

Quantumscape CEO on why shares have plunged more than 40% – CNBC

What are analysts saying about QuantumScape?

Firstly, coverage from analysts since the completion of the merger has been limited. With only one 12 month price target from Bernstein Research. The stock has been following an extremely volatile trading pattern which would be the cause for some delay in analysts covering a 12 month forecast. The following price target available is below:

30/11/2020 Bernstein Research – analysts set their 12 month price target for QS stock to $28 a share. This suggests a downside of 50% from the current trading price. Bernstein analysts have also rated the company as Underweight in comparison to its competitors and industry performance.

The $28 price target was listed on the 30th of November, when the stock was trading between $30-$40 a share. Since that price target we are yet to have another analyst add their input on the market volatility, which may suggest it really is too early to tell which way this will go. It will be interesting to keep watch of any price target updates and coverage as we move into the new year of trading as this will suggest the “smart money” consensus.

Forecasts for QuantumScape in 2021 and beyond?

With little to no guidance from larger financial institutions, we will dive deeper into the forecasts for Quantumscape stock for the fiscal year of trading and beyond.

Financial Forecasts

The financial positioning of the company is in its pre-revenue phase. The company does not expect to commence manufacturing until 2024. The company reportedly expects revenue to grow gradually from $39 million in 2025 to $275 million in 2026 to $3.2 billion in 2027. This outlook is speculative as a lot can happen within a 4 year time period of no revenue. This has painted some doubt in investors confidence and therefore attributed to the extreme volatility of trading volumes.

What’s in the pipeline for QuantumScape?

Firstly, it is important to note the company will not enter is manufacturing phase until 2024. The company has the backings of Volkswagen AG, Bill Gates and Khosla Ventures. Additionally, the $680 million funding from the SPAC merger will provide the company the capital to expand and commercialise the “innovative” battery.

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.

What are the risks associated in the short term?

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.

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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.

Will Romeo Power stock thrive in 2021?

Romeo Power (NYSE:RMO) has been in the spotlight this week after its timely debut on Wallstreet. The company officially began trading on the 30th of December 2020, following the completion of its reverse merger with RMG Acquisition Corp. The companies first days of trading saw a decline of 35%, after PIPE investors and speculators capitalised on pre-merger gains. This article will breakdown everything you need to know about Romeo Power stock as we enter 2021.

Who are Romeo Power NYSE:RMO?

Firstly, Romeo Power is an American small-cap company who designs and manufactures lithium-ion battery modules and packs for the commercial electric vehicle market. The Californian based company peaked investor attention after RMG Acquisition Corp had announced its potential to the world.

“Since our IPO in early 2019, we have evaluated nearly 150 investment opportunities in search of a company with an industry-leading disruptive technology in the industrial or energy sector. Romeo Power stood out as a differentiated leading battery technology company for commercial electric vehicles, a sector that we think is at an inflection point and poised for unprecedented growth.”

Robert Mancini, Chief Executive Officer of RMG,

Romeo Power stock forecast for 2021 – beyond the merger

Firstly, the year ahead for Romeo Power marks a new chapter for the EV battery innovator. Furthermore, the additional $384 million cash injection is set to “provide capacity expansion and R&D to further develop the next generation of battery system technologies for commercial vehicles”.

Price Targets

Although RMO has been on Wallstreet for a short period of time, it already has price target coverage from financial analysts. According to MarketWatch data, the average 12 month price target is set at $35 a share. This suggests an upside potential of 85% from the current trading price. In other words, the general 12 month outlook from the price targets available remains bullish for 2021.

However, it is important to understand Romeo Power will eventually receive coverage from larger institutions such as Morgan Stanley and Credit Suisse. These institutions have a stronger bargaining power with their price targets, so this is something to watch in 2021.

Revenue forecasts

Romeo Power currently has $545 million in contracted revenues in the pipeline, solidifying its financial positioning. In addition, it’s prevalent announcement in November this year confirmed an agreement with an up and coming EV manufacturer Lion Electric. The contract is expected to generate $234 million in revenue for Romeo Power over a five-year period beginning in 2021. Romeo power is also publicly to have a customer base that represents 70% of the North America Class 8 market.

The risk associated with Romeo Power stock

Evidently, the past few days of trading have shown the immediate trends we see after a reverse merger is completed. PIPE investors and pre-merger speculators will tend to ride the momentum until the company is public. This is an unstable platform to balance on for the time being. Newly listed companies tend to find their feet after initial speculation. Therefore, it is important price in the risk associated with an initial sell off.

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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.

Roku stock forecast for 2021 – here’s what analysts are saying

Roku Inc (NASDAQ: ROKU) has seen a remarkable gain in investor confidence in 2020. Evidently, the Roku stock price has surged over 162% in the past six months of trading. The companies stock hit all time highs late last week after they announced their deal with AT&T’s HBO Max. The strong momentum can also be attributed to bullish analysts price targets released this month. With such positive growth, this article will breakdown what you need to know about Roku’s stock forecast for 2021.

Analysts go bullish on Roku stock – especially large institutions

Firstly, across the board of 22 Wallstreet analysts the general consensus is an overwhelming buy rating. The average 12 month price target for Roku stock is currently sitting at $244.42 a share. Although a downside of 28%, the more recent ratings in December range between $375 and $410. This is an exciting switch in smart money consensus, which investors have used as fuel to inflate the stock higher. Furthermore, Roku hasn’t received a sell rating from large institutions in over 6 months. The following price targets are from the month of December 2020:

  • 12/17/2020 Benchmark – analysts at Benchmark increased their 12 month price target from $300 to $410 a share. This suggests Benchmark analysts are confident the company has an upside of 20% from its current trading price.
  • 12/17/2020 Bank of America – analysts boosted the 12 month price target from $360 to $380 a share. This is an upside of 11% over the next 12 months of trading.
  • 12/9/2020 CitiGroup – boosted their 12 month price target by an impressive 66%. The price target was boosted from $220 to $375 a share. This is an upside of 10% from its current trading price.

The price targets from Benchmark and Bank of America came after the AT&T deal which will likely reach millions of new subscribers. Timing of the deal was key for Roku as the superhero sequel “Wonder Woman 1984” from AT&T’s Warner Bros is set to premiere on HBO Max on Christmas Day. With a transition from movie theatres to home streaming, this strategic deal is a text book move from Roku management.

Breakdown on Roku financial forecasts for 2021

The Q3 earnings released on the 5th of November, provided investors with some very positive revenue and gross profit growth. The total net revenue grew 73% year on year to $452 million for the quarter. It was also noted that platform revenue increased to $319 million and Gross profit was up 81%. The company did note in their outlook for Q4 that expenses are likely to grow due marketing and headcount costs. Interestingly Roku were quite conservative on their outlook for Q4 guidance, releasing the following statement below:

“We anticipate that the overall Q4 year-over-year revenue growth will likely be in the mid-40% range, similar to the growth rate in the last few holiday seasons, and we expect platform revenue to account for roughly two-thirds of total revenue. In line with our typical promotional approach to the holiday season, we plan to keep Q4 player gross margins close to breakeven, while we expect Q4 platform gross margins to be in the mid-50% to 60% range which is between the Q2 and Q3 levels.”

Roku Q3 earnings statement on looking forward to Q4 predictions

With little to no concrete guidance we can look to what analysts are predicting for revenue guidance for 2021. According to Yahoo finance, the average revenue forecast amongst 24 analysts places an annual revenue of $1.73 Billion in 2020. The 2021 revenue forecast extends to $2.39 Billion, a 37% revenue growth YOY. These are positive figures for long standing investors holding Roku stock.

Summary

I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

In conclusion, Roku stock has had a sublime second half of the year on Wallstreet. The returns on Roku stock have rewarded the longer term shareholders with COVID-19 driving revenues to new heights. From an analyst standpoint, it is clear majority favours Roku stock to outperform in 2021. Furthermore, the recent upgrades in December from the likes of Bank of America and Citigroup cement investor confidence. The financial forecasts look positive, however no real guidance was released by Roku in the Q3 statement. Whether this was a ploy from executive management to undersell and outperform or simply to cover the risk, its important Roku can stand and deliver to these forecasts.

Written by Tyger Fitzpatrick, Founder of Youth Investment Group.

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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.

NVDA stock forecast for 2021 – the bulls take charge

NVIDIA Corporation (NASDAQ: NVDA) has provided investors a golden opportunity in 2020 for steady growth. The companies share price has gained 132% in value in 2020 alone. The tech giant manufactures Graphic Processing Units (GPU) for Gaming and specialised markets. With such positive growth, analysts have weighed in and the 12 month outlook may surprise you. This article will breakdown what you need to know about NVDA’s stock forecast for 2021.

What are analysts forecasting for NVDA stock?

Firstly, the companies outlook from analysts perspective is overwhelmingly bullish. Across the board of 37 Wallstreet analysts, the average rating from NVDA stock is a buy (29/37 Buy ratings). The average 12 month price target for NVDA stock is $536.32 a share. The higher end price targets from analysts reach as high as $700 a share, suggesting an upside potential of 34%. Furthermore, the lowest target released from analysts last month was at $500 a share (downside of only -3%).

Some of the largest institutions have weighed in on NVDA

Evidently, analyst sentiment has cemented confidence in the longer term performance of NVDA on Wallstreet. Here are some of the more recent targets released by some of the largest financial institutions in the world.

  • 11/19/2020 Barclays – analysts increased the 12 month price target from $525 to $550 a share. The overall rating from Barclays is overweight, suggesting the UK financial institution sees stable growth for NVDA stock.
  • 11/19/2020 Bank of America – analyst Vivek Arya increased the price target from $650 to $665 a share. The target suggest an upside potential of 29%. BoA are clearly confident in the tech giant.
  • 11/19/2020 UBS Group – analysts increased the 12 month price target from $625 to $650 a share. Evidently, both UBS and BoA are very confident the stock will break the $600 price barrier in 2021.
  • 10/6/2020 JP Morgan Chase & Co – with a rating of overweight, analysts increased the 12 month price target to $605 a share.

What are the financial forecasts for NVDA moving into 2021?

Firstly, the strong revenue growth for the company in 2020 has been a key driving force in investor confidence. In the most recent quarter, the company recorded revenue of $4.73 Billion, a 57% improvement year on year. The company actually broke multiple records in quarterly revenue, being gaming revenue, Data centre revenue and overall revenue.

“NVIDIA is firing on all cylinders, achieving record revenues in Gaming, Data Center and overall… The new NVIDIA GeForce RTX GPU provides our largest-ever generational leap and demand is overwhelming. NVIDIA RTX has made ray tracing the new standard in gaming.”

said Jensen Huang, founder and CEO of NVIDIA.

The revenue forecasts for NVDA for 2021-2022

The annual revenue forecasts for 2021 suggest an accrued revenue of $16.49 Billion according Yahoo Finance data. Moving forward the estimated revenue for 2022 is set to rise to $19.85 Billion. This would be a realised 20% growth in revenue for 2022, which is relatively strong for a large blue chip stock. Furthermore, the EPS predictions annualised tend to follow a 50% improvement YOY for 2021 and 2022. The 2022 EPS is estimated around $8 annually, which is a significant improvement from 2020.

What are the ‘smart money’ indicators saying?

The institutional ownership changes can provide investors insight into how larger fund managers perceive NVDA stock. Changes of ownership can be due to many reasons, however certain indicators can set off alarm bells for investors. For example, unusual selling from some of the companies largest institutional holders can be a red flag for investors. The largest holder of NVDA stock is Nuveen Asset Management with a market value of $2.86 Billion. For this quarter, Nuveen increased their holdings by 3.2%.

In summary, this quarter produced a surplus of ownership with institutions buying the stock at a greater volume than selling. This is in comparison to the previous quarter with more institutional investors selling than buying. Historically, the companies greatest influx of smart money was in the Q1 of 2019 with a $20 Billion influx. If you had bought shares after this data was made public in April 2019, your shares would be worth 173% more today.

Summary

I am obliged to remind our viewers that this is not advice but rather investment commentary from extensive research.

In conclusion, NVDA is showing some positive signs moving into 2021 for long term investors. The positive analysts sentiment, aggressive revenue growth and a surplus in institutional ownership has set the company up for a strong 2021. This is not to mention its largely publicised acquisition with ARM which is a classic example of vertical integration. NVDA stock will be one to watch closely as we transition into 2021.

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Stake is one of the leading US trading platforms for Australian and UK investors. Click here to start trading US stocks with $0 commission on trades and a streamline trading experience. For more information on our referral program click here.

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.

PIC closes in on XL fleet merger – here’s what you need to know

Pivotal Investment Corporation II (NYSE: PIC) announced on Tuesday they will be holding an annual meeting on December 21 for shareholders to vote on the proposed merger with XL Fleet. The shareholder vote is one of the last steps in the lengthy merger process. In addition, both companies will merge under the one ticker, NYSE:XL. PIC has since seen a surge in the stock price, with the stock climbing to $17.58 a share. If the shareholder vote is successful we may potentially see XL trading on Wallstreet before the new year.

PIC and XL Fleet key merger details

Initially, the PIC merger announcement made waves on Wallstreet midway through September this year. The mergers implied enterprise pro forma value is an estimated at $1 Billion. The merger will provide XL Fleets $350 million in much needed funding for international expansion. PIPE investors will receive $150 million in common stock for $10.00 a share.

  • The shareholder meeting is scheduled for the 21st of December, marking one of the last steps in the mergers transaction process.
  • The funds raised in this transaction ($350 million) will go towards XL’s expansion plans. This includes the development of new products and services and operational expansion internationally.
  • The merger is likely to be finalised before 2021, assuming shareholders approve of the merger terms.
  • Both companies will merge and will commence trading under the new stock ticker NYSE:XL.

“We are pleased to reach this significant milestone in the merger process, which brings XL Fleet one step closer to becoming a public company. Over the past several months, XL Fleet has reinforced our conviction that it will emerge as a winner in the vehicle electrification market.”

Kevin Griffin, a Pivotal Director on the shareholder meeting announcement.

Why investors are bullish on XL Fleet?

Firstly, XL Fleet are not your average EV innovator. Similar to Hyliion, XL supplies electrified powertrain solutions. Customers of XL Fleet include the likes of Ford, Chevrolet, GMC, and Isuzu. According to XL Fleet, the company has thousands of XL units already on the road which have collectively driven over 130 million miles. In addition, XL Fleet’s electric drive system “was named one of TIME magazine’s best inventions of 2019”.

Financial outlook for XL Fleet

One strong positive we can take from the public listing is that the company already has their technology on the roads. We have seen numerous examples of SPAC listings with EV developers who are yet to produce a single unit for sale.According to XL, the company has “strong demand momentum with a $220 million 12-month sales pipeline”. The forecasted revenue for the fiscal year is expected at $21 million whilst 2021 is forecasted at $75 million. The financial projections are strong however are a fraction of what EV manufacturers are forecasting to turn over for 2021 and beyond.

“We believe that this transaction will enable XL Fleet to advance and accelerate the growth of our industry-leading fleet electrification business, including a rapid expansion of our product offerings. With thousands of XL-equipped vehicles already on the road today, we are excited to continue to pave the way for fleets seeking to promote sustainability while improving operational efficiency.”

Chief Executive Officer Dimitri Kazarinoff

What’s next for PIC/XL Fleet investors?

With merger on the brink of finalisation, both companies are on the verge of a very exciting era of development. Assuming the shareholders vote is approved, the merged company will trade on the NYSE under the ticker XL. Investors will be able to buy XL Fleet shares directly on the equity market. Hence, posing further questions as to where the stock will go in 2021. The first few weeks after listing are the most important times to collect data and analysis on a newly listed stock. Once XL Fleet is listed, it will be interesting to see how analysts perceive XL Fleet.

As the company is in full flight, its quarterly earnings starting in 2021 will be highly speculated by investors. With a strong revenue guidance from the company, its vital management can follow through. Furthermore, investors will need to be aware of the direct competitors that are entering Wallstreet. If we compare XL Fleet to Hyliions SPAC merger, there are definitely some similarities. Both companies are offering an immediate solution via powertrains to offer to fleet companies. This solution allows for companies to slowly integrate greener tech without extreme damage to the balance sheet. As competitors, Hyliion will be one for XL Fleet investors to watch.

Summary

I am obliged to remind our viewers that this is not advice but rather investment commentary from extensive research 

In conclusion, both PIC and XL Fleet are entering an exciting period of growth. The merger marks one of the many SPAC transitions we have seen, particularly in the EV industry. The merger is expected to be completed within the fiscal year assuming the vote goes to plan. From here, more data will be available for investors to judge the long term outlook for XL Fleets once the company is public. Our team will look to provide a 2021 forecast for XL Fleet stock once the company is public.

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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.

Northern Genesis stock surges on merger with EV innovator

Northern Genesis Acquisition Corp (NYSE: NGA) announced last week they have entered an agreement to merge with EV manufacturer Lion Electric. The merger adds to the vastly growing list of EV innovators jumping on board the SPAC train to raise much needed capital. The NGA merger is to be completed in the first quarter of 2021. Northern Genesis stock has since surged after the announcement, increasing by 50% in the past month of trading. This article will breakdown everything you need to know as we move closer to the Northern Genesis & The Lion Electric Merger in Q1 2021.

Key details of the Northern Genesis/ Lion Electric merger

The merger will see both companies combine under one trading name, NYSE:LEV. The transaction includes a $200 million private placement of shares from PIPE investors. The merger itself is expected to net Lion Electric $500 million in Cash to inject into their expansion strategy. In particular, the proceeds will go towards planned construction of a “state-of-the-art” US based vehicle manufacturing facility. Furthermore, the company will also focus on the development of advanced battery systems and the construction of a high tech automated battery system assembly factory.

  • The pro forma implied market capitalization of the merged company is $1.9 billion USD.
  • Lion Electric’s existing shareholders will hold 70% of the combined company’s common equity after the merger is completed.
  • The merger will concrete Lion’s positioning as a leading medium-large all-electric vehicle manufacturer according to Northern Genesis.
  • Shareholders will need to approve of the merger and all regulatory requirements can be met.
Special-purpose acquisition company

Whats the outlook for Northern Genesis stock pre-merger?

I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

Firstly, it’s important to ensure investors understand how a SPAC works and operates on Wallstreet. A SPAC or a Special Purpose Acquisition Company will look to find high growth companies to take public and raise capital, whilst doing majority of the background work. For example, a recent trend we have see this year is SPAC’s taking high growth EV companies public (eg. Hyliion, Fisker, Lordstown Motors and Nikola).

The common theme amongst these companies saw investors jump on board as the merger edged closer to its expiration date. This can generate a bubble that is susceptible to pop once the company lists publicly and the high demand/volume tires. Therefore, its important to understand how to evaluate a company pre and post merger, inclusive of the effects of the SPAC transaction and PIPE investors on the stock price.

Bullish outlook on Lion Electric moving into 2021 and beyond

The Lion Electric is a leading all-electric medium and heavy-duty urban vehicle manufacturer based in Canada. The company currently has 300 vehicles on the road with over 6 million miles driven collectively. In addition, Lion expects to increase this number to 650 by 2021. Furthermore, Lion has also stated they have 6,000 potential vehicle sales in the pipeline over the next 3 years of operating. Revenue is forecasted to increase by 608% year-over-year to $204 million in 2021, this is expected to grow to $1.67 Billion according to a Benzinga source.

Secondly, the upside is the company already has vehicles on the road, which is already 2 steps ahead of 50% of the EV industry. As demand heats up over the longer term, a US Government contract for school buses would offer security for Lion. Evidently, the company has mentioned the Biden Clean Energy Plan, which notes for 500,000 school buses to run on zero emissions by 2030. This will be something that long term shareholders will have their eye on.

“Lion surpasses our expectations on all these dimensions and we are confident that it has potential to be a great public company in the emerging decarbonized economy.”

said Ian Robertson, co-founder of Northern Genesis.

Whats the risk associated with the Northern Genesis/Lion merger?

The US and Chinese EV industry on Wallstreet is growing at a rapid pace. Many companies have entered the market through a Shell company or SPAC this year. So where does this leave investors?

The EV industry is becoming more and more competitive, which will force companies to drive growth at full speed. Furthermore, the demand for these vehicles has been solidified by Government intervention for a longer term transition. However, the short term demand may hurt investors in the EV industry. For Lion, EV buses is a great differential however it will directly compete with its UK counter part Arrival.

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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.

What the Salesforce Slack acquisition means for investors

Salesforce.com, inc. (NYSE: CRM) announced yesterday the acquisition of Slack Technologies (NYSE: WORK). Since rumours first broke of the announcement of the acquisition, Slack shares bounced from $29 to $40 a share. The definitive agreement marks an estimated enterprise value of $27.7 billion based upon Salesforce’s current trading price. The transaction is expected close in Q2 of Salesforce’s fiscal year 2022. This will be” subject to approval by the Slack stockholders, the receipt of required regulatory approvals and other customary closing conditions.” This article will breakdown everything you need to know about the acquisition as investors await the prolonged transaction process.

Key details of the Salesforce and Slack Acquisition

The acquisition was announced after-hours on Tuesday, setting in stone the rumours surrounding the proposed acquisition. The terms of the agreement will provide Slack shareholders $26.79 in cash and 0.0776 shares of Salesforce stock. In the current market the 0.0776 values at $18.72 per share, which totals the value of the payout to $45.51 a share. Now this of course will fluctuate over time, especially with the acquisition poised for mid 2022.

The acquisition itself is an exciting new chapter for both companies, however the big ticket item is the potential market share Salesforce will gain in the long term. The COVID impact on businesses has driven a more flexible workforce environment which has proven to work within corporations that have adapted the right technology. Microsoft 365 is without a doubt thriving from this change, and salesforce are eyeing off this new age market share.

“Salesforce started the cloud revolution, and two decades later, we are still tapping into all the possibilities it offers to transform the way we work. The opportunity we see together is massive… As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going.”

said Stewart Butterfield, Slack CEO and Co-Founder.

What this means for investors of Slack and Salesforce?

Firstly, investors who own shares in a company that is likely to be acquired prefer a full Cash Agreement. A Cash payout for existing shares in the company is something that remains stable in value. A transaction of existing shares in the acquirers company poses imminent risk. If the acquirers stock is to lose value the payout becomes increasingly less attractive. The 50% split of Cash and Shares is common, however still poses a deal of risks to shareholders. Until the acquisition deal closes, the companies stock will track the value of Salesforce alongside the calculation of the Cash payout. What this means is that the Slack stock will be limited to any further potential growth.

Analysts double down on HOLD ratings

Interestingly, 6 analysts have updated their price targets for Slack stock, which all 6 have either downgraded their buy rating to a hold or reiterating their 12 month price target at $45-$46 a share. Today, across the board off analysts the average downside potential from the price targets has dropped to 17%. Analysts at Barclays set a price target for slack at $36 and downgraded the stock to equal weight when it was previously at overweight. This was due to valuation concerns. Analyst Raimo Lenschow said that Barclays now sees limited upside for Slack’s shares while also being “mindful of the risk for meaningful downside in case a bid does not materialize,” due to the “healthy valuation level” of shares.

Summary

Before I begin, I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

In conclusion, the acquisition is a huge step for Salesforce to cement themselves in the new age business software and operations markets. For Slack investors, the build up towards the acquisition should see little to no movement above the payout value. If Salesforce increases in value, we may the Slack follow the same trend. With many hurdles to jump from here to Q2 2022, the Slack stock will also remain price sensitive to any news regarding the acquisition. Our writers will continue to cover any developments as we move into the next fiscal year.

Written by Tyger Fitzpatrick and research completed by Zac Lorschy.

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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.

CIIC surges 200% after the EV merger announcement

CIIG Merger Corp (NASDAQ: CIIC) announced late last week the merger with Arrival, a promising UK Electric Vehicle manufacturer. The SPAC has since gained over 200% in the past week of trading, illustrating the bullish investor sentiment. Arrival Ltd. has peaked the interests of investors, with its evolutionary EV passenger bus and van models. Furthermore, the interest from larger institutions such as BlackRock and the strong 2021 forecasts has investors on high alert. This article will breakdown everything you need to know about CIIC stock moving into 2021.

What are the key details surrounding the CIIC merger?

The merger between CIIG Merger Corp and Arrival Ltd was announced on the 18th of November. The definitive merger deal will see the SPAC merge with Arrival under the new listing of ARVL. The enterprise value of the merger is valued at $5.4 Billion. Arrival is expected to raise $660 million in cash proceeds to put towards the manufacturing and development of the Electric Vehicle models. The Arrival Board of Directors have voted for the approval of the transaction, which is to take place in the first quarter of 2021.

Which “smart money” institutions hold CIIC stock?

Firstly, Institutional ownership can be a key factor when assessing SPAC listed companies such as CIIC. Looking at the largest institutional holders of CIIC and tracking their quarterly change in holdings can give investors a good idea of the current smart money sentiment. The institutions holding largest stake within CIIC are BlackRock, Omni Partners, Glazer Capital and P Schoenfeld Asset Management. Blackrock holds by far the largest stake in CIIC, with 6% stake or a current market value of $19.45 million according to MarketBeat data.

BlackRock is widely known for its diversified portfolio of Electric Vehicle companies both within the United States, United Kingdom and China. Arrival has also landed larger investments from Hyundai Motor Company, Kia Motors Company, Winter Capital and UPS.

What you need to know about Arrival

  • The EV innovator Arrival has signed contracts with total order value up to US $1.2 billion. This has been a key driver in investor confidence for Arrivals long term outlook.
  • Arrival expects its first products to commence production in Q4 2021.
  • Arrival has 1,300 global employees located in offices across the United States, Germany, Netherlands, Israel, Russia, and Luxembourg.
  • The company plans for its first two Microfactories to be built in South Carolina, USA and Bicester, United Kingdom in 2021. The Microfactories have been a big talking point amongst retail investors after Jim Cramer called a buy rating on CIIC.
  • UPS has entered an agreement with Arrival to pre-order 10,000 EV vans.

“With Arrival’s products our clients are not forced to compromise between being green and being cost efficient. Our focus on the whole EV ecosystem, new methods of design and production and our enabling technologies are the key to driving down the cost of EVs and accelerating the transition to zero-emission transportation globally.”

said Denis Sverdlov, Founder and CEO of Arrival.

Summary

I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

In summary, CIIC’s strong growth is attributed to the positive outlook on Arrival moving into 2021 and beyond. Although the company is yet to make their first delivery, the opportunity for long term growth is strong. What stands out to me is the EV Bus model which if brought to commercialisation could prove a buying spree for Government transport industries in the UK and the US. Furthermore, Arrival offers an opportunity for US investors to differentiate from the saturated US and Chinese EV SPAC market.

In contrast, CIIC is only the shell corporate of the company. With a 200% increase in value over the past week, market fundamentals would suggest a pullback is on the horizon (opinion not advice). In addition, we have seen with WKHS and HLYN a decline in market value after the merger. We will continue to update our viewers on the important updates regarding CIIC as we move closer to the merger in 2021.

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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.

Bank of America turns bullish on NIO stock

Nio Inc – (NYSE: NIO) has continued to outperform analysts expectations this year as the Chinese EV continues to deliver strong revenue growth. The companies stock price has seen a remarkable gain of 2,500% over the past year. The trading activity has seen a spike in recent days after the Q3 earnings announcement alongside the bullish BOA analyst upgrade. This article will breakdown the key analysts price targets and guidance from the Q3 earnings for NIO investors moving into 2021.

Key price targets from analysts moving into 2021

The general consensus amongst analysts has significantly improved over the course of the past few months. Goldman Sachs downgraded their NIO rating to a sell in July this year, pricing the company at a meer $7 a share. Fast forward a few months and larger institutions are chasing their tail to increase the price targets on this stock. Below are the more recent key 12 month price targets from analysts:

  • 11/18/2020 Bank of America – BOA analysts boosted the 12 month price target from $23 to $54.70 a share. Analyst Ming-Hsun Lee boosted the price target 19% above the current trading price.
  • 11/9/2020 JP Morgan Chase & Co – the institution boosted their price target from $40 – $46 a share. The company at the time was trading around $40 which suggested 15% upside potential.
  • 11/4/2020 Smith Barney Citigroup – increased the 12 month price target from $33.20 to $46.40 a share. This upgrade had a strong impact on the NIO stock price, as investors quickly bought up stock at sub $40 pricing.
  • 11/3/2020 Deutsche Bank – The bank reiterated their buy rating at $34 a share whilst the company was trading within the $30-$40 band.

What do these price targets translate for investors?

The general consensus across the board of analysts from larger institutions remains an average hold rating. However, the month of November has seen 4 updated ratings of which all suggested a buy rating. This shows NIO investors larger institutions are beginning to swing their sentiment towards a more bullish outlook for 2021. The Bank of America upgrade was the first target above $50, which suggests BOA are confident the stock has room to grow in the next 12 months.

What to take from NIO’s Q3 earnings

The key focus on both US and Chinese EV manufacturers is on the delivery numbers. NIO posted an impressive 12,206 deliveries for this quarter, outdoing Li Auto and XPeng. This was an increase of 18% from the previous quarter. The companies revenue posted an impressive US $666.6 million for the quarter, a 21.7% increase from the previous quarter. More impressively was the increase in vehicle margin at 14.5%, a 9.7% increase from the second quarter of 2020.

“We achieved a new record-high quarterly deliveries of 12,206 ES8s, ES6s and EC6s in total in the third quarter of 2020, followed by the best-ever monthly deliveries of 5,055 vehicles in October… In view of the growing market demand for our competitive products, we are motivated to continuously elevate the production capacity to the next level. We expect to deliver 16,500 to 17,000 vehicles in the coming fourth quarter.”

William Bin Li, founder, chairman and chief executive officer of NIO

Guidance provided from the Q3 earnings

The guidance provided from NIO for the Q4 to be released in 2021 alongside longer term outlook appears extremely positive. The key guidance is listed below.

  • 16,500 to 17,000 vehicles expected to be delivered in Q4
  • Q4 revenues expected to reach US $921.8 million between US $947.9 million representing, an increase of approximately 38.3% to 42.2% from the third quarter of 2020.
  • Analysts predict revenues for 2021 to reach $4.52 Billion which will double the annual revenue from 2020.

Summary

I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

In conclusion, the past month has seen analysts shift their sentiment towards the outlook on NIO stock. The strong guidance from the Q3 earnings is definitely a driving force for the bulls moving into 2021. In my opinion, the BOA boosted price target well above the current trading price may push the stock higher. Investors will generally look at BOA price targets as a conservative measure of pricing in 12 months. However, its important to note external factors may play an influential role in NIO’s performance. All risks associated with NIO should always be analysed and priced in with your risk strategy.

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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.

Palantir stock turns bullish – do analysts suggest a buy rating?

Palantir Technologies (NYSE: PLTR) has surged by 16% on Friday as investors continue to rally behind the big data specialist. The company made headlines on Wallstreet as it completed its long awaited IPO on September 30th. The stock price staggered at $10 throughout October after its debut on the NYSE. However, recent coverage from analysts and earnings forecasts have bolstered the long term outlook for the company moving into 2021. This article will breakdown what analysts are saying about Palantir stock and what the forecasts are moving into 2021.

What are analysts saying about Palantir stock?

According to CNN data, the average 12 month price target from 5 analysts suggests a median price of $11.00. The higher quartile suggests a price target of $13 a share and the lower end suggests a more conservative target at $10. Now its important to note these price targets were announced on the 26th/27th of October respectively. At that time, the stock was trading at $9.95 a share which suggested the company had a positive upside potential of 10%-30%. In the past week, the stock has surged past the higher end price targets, likely to hit $14 at market open Monday.

The institutions who have weighed in on Palantir include the likes of CitiGroup, Morgan Stanley, Credit Suisse Group and Goldman Sachs. Morgan Stanley listed an overweight rating and price target of $13, which represented 31% upside potential at the timing of the announcement. Three analysts have listed the company rating status as Hold while the other two main institutions have picked Palantir as a buy. With such momentum building behind Palantir, analysts will likely update their positions into early 2021. Upgrades from initial positions will likely be a catalyst for further stock price growth.

Why is Palantir stock currently surging?

The company surged by 16% on Friday on no news, suggesting investors are beginning to build momentum behind the big data tech. Firstly, the momentum generated has been a bi product of its potential for revenue growth moving into 2021. Morgan Stanley’s research led by Keith Wess noted that the shift to Software sales and Government opportunity are key drivers for stock growth. The company has expanded its customer base to serve local & federal governments and companies in the financial & healthcare sector.

The company is forecasted to hit $1.04 Billion in revenue for 2020. Forecasts predict a 32% increase in revenue for 2021, with $1.4 Billion in annual revenue. With earnings for Q3 to be released on November 12, the forecasts guidance remains very optimistic. The EPS for this quarter is forecasted to be $0.02 a share turning over $296 million.

Why Investors are treading with caution with big data companies

There is no doubt the Palantir movement is exciting for investors. However, it’s worthwhile noting the risks involved with all big data companies. As noted in our previous article on Palantirs IPO, the misuse of big data can be detrimental for shareholders and the general public. For example, the Cambridge Analytica scandal saw Facebook shares plummet, hence hurting positions of long term shareholders.

Secondly, the companies ties with Government agencies has sparked criticism from activists and the media. These factors are calculated into the risk when purchasing shares in a company that operates within the Big data sector or Government agencies.

“As our business has grown and as interest in Palantir and the technology industry overall has increased, we have attracted, and may continue to attract, significant attention from news and social media outlets, including unfavorable coverage and coverage that is not directly attributable to statements authorized by our leadership, that incorrectly reports on statements made by our leadership or employees and the nature of our work, perpetuates unfounded speculation about company involvements, or that is otherwise misleading.”

Palantir response to public criticism TechCrunch.com – See full article here.

Summary

Before I begin, I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

In conclusion, the Palantir investor momentum looks to remain bullish for the time being. Although only initial coverage, analysts such as Morgan Stanley are confident the stock will continue to see growth in its sector. The risks associated with the Big data industry are prevalent as seen with Cambridge Analytica. Although without risk, there is no reward. The November 12th earnings will shed more light on further revenue guidance moving into 2021. Furthermore, we can expect analysts to provide further coverage moving into next year, which could see the stock really take off (opinion not advice – see full disclaimer below).

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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.

Will Hyliion stock bounce back? Here’s what analysts are saying

Hyliion (NYSE: HYLN) stock has been on a downward trend losing 54.64% in value over the past month. The sell off incurred shortly after the SPAC merger was finalised on the 28th of September. Hyliion hasn’t been the only EV listed company who has seen short selling. WKHS and even Tesla have lost 33% and 8% value respectively over the past month. With Hyliion currently staggering at $18, analysts price targets are now suggesting greater upside potential. This article will breakdown what analysts are saying about Hyliion stock.

What are analysts saying about Hyliion stock?

According to CNN and NASDAQ data, the current 12 month price targets by 2 analysts averages at $24.50. This suggests an upside potential of 31% from the current trading price. The price target coverage is from two large institutions – JP Morgan and Goldman Sachs. The JP Morgan coverage has a neutral rating with a 12 month target at $27 (44% upside potential). Whilst the Goldman Sachs coverage is more conservative with a price target of $22 (17% upside potential).

Both of these targets were set in the later half of October suggesting both analysts see potential in this recent sell off. Although these targets are limited in coverage, we can coincide that both large institutes feel neutral about their price targets above the current price.

Hyliion revenue forecasts moving into 2021

Firstly, the long term revenue guidance released by Hyliion is based upon the success of its technology as well as its ability to reach its target demand figures. Hyliion forecasts “revenue of $344 million in 2022, $1.019 billion in 2023, and $2.091 billion in 2024”. These are impressive improvements which would see Hyliion’s EBITDA improve dramatically alongside its ability to free significant Cash Flow. However, these forecasts are not reflective of the current business performance, mainly due to the company in the pre commercialisation phase.

How Hyliion stock tracking moving into 2021?

Hyliion has received 1,000 pre orders from its strategic partner Agility Logistics. Its worth noting Agility have a $39 million stake in Hyliion. Hyliion also announced on the 15 of October that they had entered a partnership with American Natural Gas which notes ANG will “pre-order up to 250 Hypertruck ERX vehicles, allowing for early availability of Hyliion’s fully electric powertrain to ANG and its fleet customers.” The partnership will also provide Hyliion customers discounted Renewable Natural Gas. The partnership also includes new ANG fueling stations built closer to Hyliion customers.

“A robust and highly scalable infrastructure is critical to the adoption of our electrified solutions. That’s why we’re working with ANG to reduce costs and enable us to offer our customers refueling stations where they are needed. Hyliion customers can continue their journeys to electrification with confidence that RNG will be available at a price that can reduce their ownership costs over the lifetime of their vehicles.”

said Thomas Healy, CEO and founder of Hyliion

What is the bear argument?

The Bears argue that the stock will continue to fall as we move into 2021. The main argument is that the companies technology is still under scrutiny. Bonitas Research published an article regarding the inefficiencies of Hyliions technology. According to Bonitas Research, the company does not reduce fuel costings by 10% as the company claims. I will leave the link to the research article here for those who are interested. It is definitely worth noting Bonitas Research publishes speculation based upon their research.

This research publication alone sparked uncertainty amongst investors, primarily for speculators and short term shareholders. We have seen this occur recently with Nikola and a short seller publication from Hindemburg Research. These allegation side effects on the share price tend to be short lived assuming SEC does not get involved.

YIG’s take on Hyliion moving into 2021 – will Hyliion stock bounce back?

In conclusion, the bears case seems to sustain similar counter arguments for all emerging EV companies in the market. I can remember clearly writing articles on Tesla over a year ago and the Bears were imminent that the stock price was overvalued at $200. I strongly believe the way of valuing EV stocks is outdated and the industry as a whole will remain over valued 5-10 years from now. In saying that, not all companies will be a Tesla equivalent. It is in my opinion the best valuing method is to understand the competition as well as what the company can bring to EV.

In regards to Hyliion, the ERX model is most certainly differentiated from the EV manufacturers. Its also worth noting the company can bring a solution for many fleet companies who cannot afford (lack the Cash Flow) to move over to EV vehicles. However, the imminent risks facing the stock including market volatility will impact the stock price moving forward (opinion not advice – see disclaimer below).

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Stake is one of the leading US trading platforms for Australian and UK investors. Click here to start trading US stocks with $0 commission on trades and a streamline trading experience. For more information on our referral program click here.

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.

Analysts are bullish on NIO stock – here’s what investors need to know

NIO (NYSE: NIO) has continued its bullish path throughout 2020, with the stock gaining an eye watering 2008.97% YTD. NIO’s bullish investor sentiment this year has outweighed majority of its smaller competitors. The “Tesla of China” is driving significant growth in the EV industry, particularly in the Asia Pacific region which has intrigued investors in the US. This article will breakdown what analysts are saying about NIO moving into 2021.

What are Analysts saying about NIO stock?

Firstly, analyst consensus across the board is bullish on NIO stock. The 12 month price targets from 17 analysts from CNN show a median price at $155.80. This suggests an upside potential of 409% based on median pricing. The upper quartile from the pool of NIO analysts suggests a 12 month price of $269.54 whilst the lower quartile of prices NIO at $44.12. Assuming NIO can continue to excel in deliveries, analysts are confident the stock will break triple digits in 12 months.

Now based upon CNN data we can conclude these price targets are extremely bullish. To bring these targets back down to earth, we will dig deeper into what institutions are pricing the company. JP Morgan recently upgraded their price target to $40 and Credit Suisse has upgraded their target to $25 from $12.50. HSBC recently placed a hold rating at $30 a share which has left some investors confused, as the stock soared past $30 in the past week.

According to WSJ data, the consensus amongst analysts suggests the stock is overweight. An overweight rating from analysts suggests the stock is likely to grow in the future. This is promising for long term shareholders, especially with such aggressive 12 month forecasts by analyst. In recent months Morgan Stanley and JP Morgan have upgraded their their NIO rating from neutral to overweight.

Morgan Stanley analyst Tim Hsiao on NIO stock

Tim Hsiao has made his name well known amongst the NIO investor community, with his bullish views on the Chinese EV innovator. Tim Hsiao explains the margin on vehicles is likely to increase significantly in the coming years as NIO improves its scale and supply chain management through injections from its working capital.

“Stock performance, funding access and industry franchise together create self-reinforcing momentum and make NIO an even stronger player to grow its operations and investment value. Despite performing more like a trading stock nowadays with significant volatility, it’s also a growth stock with long-term value unfolding amid recent operational progress,”

Tim Hsiao on NIO stock – NASDAQ article

NIO operations and its increasing demand

Comparing this with other EV companies forecasts such as Workhorse, Hyliion, NKLA and Lordstown – it is clear analysts are favouring what NIO can bring to the EV industry. However its important to note NIO are expected to deliver 11,000 -11,500 EV vechiles this quarter. This high demand is separating them from its American EV counterparts besides Tesla.

Revenue forecasts for NIO reign supreme

Firstly, the average revenue forecast by 14 analysts suggests 2021 revenue to increase by 95% from 2.24 Billion to 4.02 Billion. This revenue growth is set on a 79% increase in sales growth year on year according to Yahoo finance data. Secondly, vehicle sales in the most recent Q2 earnings were recorded at $493.4 million which was a 146% increase from Q2 2019. Lastly, revenues are expected to be on par come the Q2 earnings call on the 17th of November with a guidance of $572.9-$596.2 million, a 10% increase quarter on quarter.

What are the bears saying about NIO stock?

However with such strong revenue performance the company still ran a $166.5 million net loss incurred from high operational costs. This is a common theme amongst EV manufacturers. The general consensus amongst bears suggest the analysts price targets are overpriced. The institutional price targets are improving, however do not share the same optimism as the targets from the CNN data.

The impact of the election outcome and the increasing COVID-19 cases in the US may effect the stock price moving into 2021. We have seen the power of institutions such as JP Morgan and Morgan Stanley impact NIO’s stock sentiment. Therefore, any negative downgrade even from overweight to neutral could see NIO sell off 5%-10% weight.

Summary

In conclusion, the analysts are definitely showing signs of bullish optimism for the next “Tesla of China”. The revenue and delivery forecasts for the upcoming Q3 earnings should provide long term investors incentive (opinion not advice). However, the economic conditions remain uncertain which may effect the investor sentiment moving into 2021. Its important the average buy in price meets your risk management strategy, and with great uncertainty pending entry points under the institutional targets will be imminent (Opinion not advice).

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Stake is one of the leading US trading platforms for Australian and UK investors. Click here to start trading US stocks with $0 commission on trades and a streamline trading experience. For more information on our referral program click here.

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.

Snap stock forecast 2021 – are the bulls too confident?

In a social media-driven world it should not shock you that the bulls are cheerleading a strong 2021 run for Snapchat. The contagious photography platform is expanding its customer base during the pandemic, which is pleasing to investors in terms of financial growth. While the bulls are telling a story of bodacious financial, customer, and share price growth come 2021, an investment does hold risk. Thus this article looks to provide both the bullish and bearish Snapchat (NYSE: SNAP) stock forecast.

Table of contents 

  1. Bullish Snap stock forecast 2021 
  2. Bearish counter-arguments 
  3. Summary 

Snap stock forecast – bullish

Analysts & price forecasts 

Snapchat analysts and price forecasts are relatively bullish. From the 39 analysts watching SNAP, 25(75%) are suggesting buy. Contrast that to 2 (6%) recommending to sell and 11 (33%) to hold. To say SNAP is bullish by just looking at the analyst registry would not be the smartest. The 12-month price forecasts from the above analysts are a high of $52, a low of $20, and a median of $40. Initially, a forecast of $20 is unattractive as it would provide investors with an ROI of -51.9%. However, considering only two analysts out of the 39 are championing sell, the low of $20 should be treated as more of an outlier. (opinion not advice). Moreover, analyst Michael Morris rose his price target from $36 to $52, as he remains “confident in the company’s long-term revenue and cash flow potential“. Thus, the analyst and price forecasts are largely bullish, but investors should have a mitigation plan in place before investing.

Financials 

Despite unprofitability, Snapchat’s financial muscle lies in having healthy cash flow and positive revenue and earnings projections.

Snapchat’s revenue expansion took, and continues to take, a linear path. However, the same cannot be said for SNAP’s negative earnings, which resembles that of a trench. The Facebook competition lawsuit was a major factor in sinking Snapchat’s earnings. Despite escaping the trench, Snap earnings seem to remain stagnate. However, after the impressive growth in Q3 earnings, investors could argue that the path to profitability is now in action. Analysts would agree with this conclusion as they forecast Snapchat to become profitable, and have a positive EPS in December 2022.

Moreover, SNAP holds $2.7 billion in cash and short term investments. Not only can this cover debt, but it provides the social media platform with a three-year cash runway. If we put this all together, revenue and cash are strong, and Snapchat must achieve profitability in three years. Considering analysts expect profitability in two years, it is fair to say the bulls are not ridiculously optimistic.

Inevitable growth in social media 

The explosion of social media usage during 2020 is another reason for the bullish optimism come 2021. Snapchat, like the rest of its social media siblings, is continually building on its platform to grow its customer base. For example, this year the addition of augmented reality, Snap Games, and discover was a like vacuum for more users. Snap’s 18% YoY growth in daily active users confirms this argument. Not to mention the way we consume information and connect is forever changed, especially in light of the virus. Between Snapchat, TikTok, Facebook, Instagram, and Twitter people have access to on-demand 24/7 news, businesses can advertise their products, and people can visually share their lives and feelings. The tracks are in place, and the social media train is not stopping or slowing down for a long time. Hence, long-term investors are equating a social media-driven world with higher revenue, earnings, and users for Snapchat.

Snap stock forecast – bearish

The two areas of concern are negative earnings and shareholder dilution. In the past year, SNAP diluted shareholders by 6.4%. Dilution is understandable if the business needs to raise extra cash to fund a strategic decision like acquiring a competitor or expanding. However, considering Snapchat is sitting on a hefty cash pile investors should raise eyebrows on the shareholder dilution.

Summary

Overall, Snapchat has strong upside potential with little downside risk as its cash runway can support the current unprofitable model for three years. (opinion not advice) The overarching trend of social media growth should serve to boost Snapchat’s user base, and thus revenue. However, an investment does hold risk, especially in the profitability department. SNAP’s current unprofitability should be a red flag for fundamental investors. Monitoring upcoming earnings, especially the next one on the 9th of February, are key to make sure the path to profitability is truly in action.

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Stake is one of the leading US trading platforms for Australian and UK investors. Click here to start trading US stocks with $0 commission on trades and a streamline trading experience. For more information on our referral program click here.

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.

Written by Senior Manager, Patrick McLoughlin