Here’s what you need to know about the GHIV merger

Gores Holdings IV Inc (NASDAQ: GHIV) is set to close in on its merger with United Wholesale Mortgage. The merger marks an exciting new chapter for the mortgage lender, as it will list on the NASDAQ under the ticker UWMC. Shareholders of Gores Holding stock voted yesterday to seal the merger, which is the final obstacle until finalisation. In addition, investors expect the merger deal to be completed by early next week if the vote is successful. This article will breakdown everything investors need to know as the GHIV merger moves closer to finalisation.

Key Details surrounding the merger 

  • GHIV closing in on its merger with United Wholesale Mortgage, LLC. UMW is the largest wholesale mortgage lender for the United States five years running. 
  • The merger is worth approximately $16.1 Billion, making this figure the biggest business combination for a SPAC company, to this date. 
  • GHIV raised $425 million from IPO which is being reinvested to UWM, and an additional $500 million raised from the private placement. 
  • Existing UWM investors will retain 94% stake in the combined company, while GHIV investors will own the remaining 6% of the combined company. 
  • The combined company will trade on NASDAQ with a ticker of “UMWC” .UMWC has plans to distribute an annual dividend of $0.40 per share. 

“After evaluating a number of potential partners for Gores Holdings IV, this transaction clearly stood out as a superior option for our stockholders. The public company currency of a newly listed business will enable the Company to continue to benefit from the ongoing tailwinds in the mortgage industry and capitalize on growth opportunities in a massive addressable market. We are excited to participate in UWM’s continued value creation through a meaningful remaining equity stake in the business.”

Mark Stone, Chief Executive Officer of Gores Holdings IV

UWMC stock forecast for 2021 and beyond

Firstly, it is clear why this SPAC merger is making so much noise on Wallstreet. Investors are banking that United Wholesale Mortgage’s can provide a potential gain as we move into the new year. Here’s what investors are banking on:

Revenue forecasts for UWM

United Wholesale Mortgage’s (UMW) net income went from $67 million in 2018 to $303 million in 2019. Furthermore, as of last year the company was estimated to reach over $2 Billion in net income. The general increase in revenue is contributed by borrowers taking advantage of the current low-interest rates by refinancing their mortgages. Furthermore, UWM has projected earnings for 2022 of $1.8 Billion. 

In addition, if the transaction proceeds it will enable UWM to accelerate the implementation of its business plan. For example, this includes the focus of providing ‘superior services’ to the companies broker-clients and to capitalize on growth opportunities.

External factors to play a role

Secondly, the company forecasts the market share of wholesale mortgages to grow to 33% by 2026, compared to past figures of 20% in 2019. According to a Barron article, CEO Mat Ishbia says “UWM is poised to succeed as rate-sensitive refinance business dies down and home buyers seek out brokers for help obtaining a mortgage”. Furthermore, the U.S. mortgage market is experienced $3.3 trillion in anticipated mortgage originations, according to data from the Mortgage Bankers Association. 

Summary

We remind our viewers that this is not financial advice. Instead, the information above is an investment commentary from extensive research.

In conclusion, it is clear this is an exciting new chapter for the mortgage broking company. Assuming the merger is to proceed, investors have vouched their interest in the mortgage broking giant. Firstly, the positive net income growth in the past year is a strong sign for investors. In addition, external factors have positively impacted the United Wholesale Mortgage business. Lastly, the cash injection from the SPAC offering will allow the business to thrive in its business planning for 2021 and beyond. However, investors should tread with caution as negative external factors could also impact the companies performance in the future.We will continue to cover developments as the companies prepare to finalise the merger assuming the vote goes through as planned.

Written by Zac Lorschy and Tyger Fitzpatrick

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 the CCIV Lucid Motor merger go ahead?

Churchill Capital Corp IV (NYSE: CCIV) stock surged almost 80% last week after rumours broke the company is in talks of a merger. The SPAC is in apparent talks with Lucid Motors, a private EV manufacturer from California. Lucid Motors has made a name for itself on Wallstreet after its made its ambitions clear to take on Tesla. In addition, Lucid Motors CEO Peter Rawlinson had spent time as an engineering executive at Tesla prior to launching Lucid Motors. With so much speculation surrounding CCIV stock, this article will breakdown everything you need to know about the rumoured merger.

Key details surrounding rumoured merger

  • Bloomberg initially released an article last week stating Lucid Motors was currently in talks with CCIV in regards to a potential merger. However, this release is yet to be confirmed by Lucid Motors or CCIV.
  • CCIV released a statement today neither confirming or denying the merger rumours. See full statement here.
  • The merger is speculated to be worth up to $15 Billion according to Bloomberg.
  • The report also notes the connection between Lucid Motors relationship with the Saudi Arabian sovereign wealth fund (PIF). Micheal Klein, owner of the SPAC CCIV also has connections with the PIF and the dots were aligned.

Why the rumoured Lucid Motors merger is a big deal

Firstly, it is clear to see why this merger is making so much noise on Wallstreet. Investors are very excited at the prospect of the potential merger and the dividends it could pay if delivered. The big selling point is that Lucid are in the process of preparing deliveries. The EV model “Air” is set to begin deliveries in early 2021. The EV model boasts horse power up to 1080hp and can reach 0-60 mp/h in 2.5 seconds. It is clear Lucid Motors are challenging Tesla in the luxury EV department, similar to the Tesla S models.

The SPAC merger will provide Lucid Motors with the much needed capital to expand on manufacturing and development. Unlike many other SPAC mergers, Lucid Motors can provide investors the peace of mind that deliveries are on the horizon in 2021. This translates to revenue, of which dictates the longevity of emerging EV innovators. With deliveries around the corner, the company can then begin to focus on vehicle sales margins and delivery growth.

The vehicles will be manufactured in their $700 million facility. The vehicle production capacity will initially be 34,000 units. According to CNBC, “Rawlinson believes the capacity to grow to 400,000 units by the end of the decade.” Rawlinson also added he plans to have 1 million vehicles produced by 2027.

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, although only a rumour at this stage – the market has already priced in the potential of this merger. In addition, the spike in interest can also attribute greater risk of volatility. With no concrete evidence to confirm this merger, the risks at the current price are mounting (opinion not advice). However, if the merger rumours are true it could be one of the biggest talking points for this quarter of trading. We will continue to cover any further news on Lucid Motors and CCIV potential merger, so stay tuned.

Written by Tyger Fitzpatrick

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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.

Are analysts now bullish on FuboTV stock?

FuboTv Inc (NYSE: FUBO) created ripples on Wallstreet last week after the company announced its plan to acquire sports betting and interactive gaming company Vigtory. The news sent the stock surging 20% higher with hopes the company will launch its sport book by the end of the fiscal year. In addition, the shift in analyst sentiment over the past 3 weeks has provided investors additional confidence moving into 2021. With such speculation surrounding the 12 month outlook on FuboTV stock, this article will explore everything investors need to know as we move into 2021.

What are analysts saying about FuboTV stock?

Firstly, the general sentiment across the board of Wallstreet analysts has shifted over the past 30 days. Amongst 7 analysts, the average 12 month price target sits at $42.14 a share. This suggests an upside potential of 31% in comparison to the current trading price. In addition, 6 analysts have listed a Buy rating whilst 1 other analyst has listed a hold rating. Interestingly, the average 12 month price target has increased by 45% over the past 30 days of trading. The following price targets are the most recent to date:

1/6/2021 Evercore ISI – analysts boosted the 12 month price target from $24 to $32 a share. The price target is well on par with the current trading price.

12/23/2020 BMO Capital Markets – analysts downgraded the rating on the stock from Outperform to Market Perform. However, the downgrade also brought about a price target update with analysts boosting the target from $33 to $50 a share. This marks the third positive change in the price target from BMO Capital in the past 3 months.

12/22/2020 Needham & Company – analysts boosted the 12 month price target from $30 to $60 a share. This suggests an upside potential of 87% from the current trading price.

Short sellers advise of FuboTV stock risks

Lightshed Partners analysts Rich Greenfield, Brandon Ross and Mark Kelley entered the spotlight after claiming the FuboTV was overvalued. The analysts listed their 12 month price target at a belittling $8 a share. The main concern from Lightshed analysts revolved around the valuation of the company, with “small” subscription numbers.

However, LightShed Partners are known amongst some investors after they had made a blunder in May 2020, placing a sell rating on Disney. It is fair to say that LightShed have had their clashes with retail investors, however it is important to review both bullish and bearish cases for FUBO stock.

Summary

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

In conclusion, the general consensus amongst Wallstreet analysts remains bullish, with the average price target 30% above the current trading price. Furthermore, we are yet to see any updates from analysts after the acquisition news was released. This could spur further bullish sentiment as the company goes for gold in its quest for a Sportsbook by the end of the fiscal year. In contrast, the bearish view remains with the valuation of the company. It will be interesting to see how LightShed and other bears perceive the acquisition news and price the company according. We will continue to cover any new price target updates for FUBO stock as we move into 2021.

Written by Tyger Fitzpatrick

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.

NIO stock forecast for 2022 and beyond

Nio Inc – (NYSE: NIO) has had a stellar year of trading, outperforming investor and analyst expectations. NIO stock has gained 334% over the past 6 months of trading, cementing its name as one of 2020’s best performing stocks. In addition, the Chinese EV manufacturer managed to deliver over 12,000 vehicles in the third quarter of 2020. With strong delivery and revenue growth, NIO has vanquished its domestic competition, Li Auto and Xpeng. With such success leading into 2021/22, this article will breakdown the 12 month forecast for NIO stock.

What are analysts predicting for NIO stock over the next 12 months?

Firstly, analysts have boosted their 12 month price targets across the board this month. This is a clear cut sign NIO continues to outplay analysts and the smart money consensus. The average 12 month price target is currently $36.44 a share across the board of 14 analysts. However, in January 2021 alone the average price target from analysts sits at $71.10 a share. This suggests an upside potential of 26% from the current trading price. The following 12 month price targets from this month are below:

1/12/2021 CitiGroup – analysts at CitiGroup increased their 12 month price target from $46.40 to $68.30. This suggests an upside potential of 20%, and has driven some market stability since.

1/11/2021 Bank of America – analysts upgraded the 12 month price target from $59 to $70 a share. Similar to CitiGroup, the upside potential is upwards of 20%. This is another key price target that had pushed the stock price above $60 last week.

1/11/2021 JP Morgan & Chase – analysts boosted the 12 month price target from $50 to $75 a share. This is currently the highest standing price target from financial analysts (smart money).

What this means for investors?

The recent consensus amongst financial institutions remains bullish with price targets now pushing above the field of $70 a share. Although these targets will continue to update as we move further into 2021/22, the key snapshot suggests analysts are confident in NIO stock and a 20% growth over the next 12 months (based upon above price targets).

Revenue forecasts for 2021

Firstly, the average revenue forecast across 14 different analysts suggests 2021 revenue will increase by over 120% from 2.24 Billion in 2020 to 4.95 Billion. Secondly, vehicle sales in the most recent Q3 earnings were recorded at $628.4 million, which was an increase of 146% from Q3 revenue in 2019. The strong revenue performance has also been a result of NIO’s improving vehicle margin which now sits at 14.50%. Lastly, revenues are expected to grow at a similar rate for the fourth quarter with the company expecting 16,500 – 17,000 deliveries. This is likely to result in revenue between $921.8 million and $947.9 million according to NIO.

“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.”

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

What does “smart money” suggest about NIO stock

Monitoring changes in buying and selling from fund managers and institutional ownership can portray what we call “smart money” sentiment. For all 4 quarters of 2020, NIO maintained more buying than selling from large institutions and fund holders. Another way to monitor “smart money” sentiment is to analyse the largest stakeholders and the changes in ownership. For example, UBS Asset Management currently holds $85 million stake in NIO, and increased their position by 8% for the quarter which is a good sign for investors.

What’s in the pipeline for NIO stock moving into 2021-22?

NIO have recently launched the BaaS and the 100kWh battery pack with proprietary thermal management and significant performance enhancement. This enables for lower initial purchase prices of vehicles and enhanced battery performance. Morgan Stanley analyst Tim Hsiao argues, reducing the cost for the end-user “will see NIO’s incremental vehicle sales increase by 10-36% between 2021-2030”. Tim further explains that if NIO could cement themselves as the BaaS captain, then they could set the industry standards. Ultimately bolstering NIO’s brand and market share in 2021, and beyond.

Written by Tyger Fitzpatrick

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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 forecast for 2021 – are analysts bullish?

Palantir Technologies (NYSE: PLTR) has seen an incredible debut on Wallstreet. The stock has climbed 194% over the past month of trading, far exceeding analysts expectations. Palantir specialises in big data analytics, in particular within the realm of law enforcement and surveillance. Last month, Palantir announced it was chosen by the US Army to receive one of two prototype contracts for the Common Data Fabric and Data Security solution. This is off the back of 15 sizeable deals struck with commercial customers, all with paper value of $5 million or more. With such strong growth to close off the fiscal year, this article will breakdown everything you need to know about Palantir stock forecasts for 2021.

What are analysts forecasting for Palantir stock over the next year?

After the IPO, coverage on Palantir stock has seen analysts underestimate the companies sharp price growth. The current 12 month price targets from analysts suggest an average target of $16.29 a share. This suggests a downside of 35% at Palantir’s current trading price. Here are the most recent price targets for Palantir stock for this month:

1/11/2021 Jefferies Financial Group – Upgraded the 12-month price target from $18 to $30. This had a strong impact on bullish investor sentiment.

12/18/2020 Credit Suisse Group – Boosted the 12-month price target from $13 to $17, changing the rating from Neutral to Underperform.

12/2/2020 Morgan Stanley – Analysts maintained the 12-month price target at $17 a share, however downgrading their rating from Equal weight to Underweight. The downgrade had a slight effect on investor sentiment.

11/13/2020 Royal Bank of Canada – analysts increased the 12 month price target from $11 to $15 a share. The price target boost came after continued investor support after the IPO.

What this means for Palantir investors?

It is clear analysts are remaining conservative/bearish on 12 month price predictions. However, we are likely to see initial coverage from larger institutions throughout 2021. This is becoming more likely with growing activity from both retail and institutional investors.

Palantir Revenue forecasts for 2021

Palantir released positive Q3 earnings results, shedding light on improved guidance for Q4 2020 and beyond. The company improved its forecasted revenue to reach $1.07 Billion for 2020. This is a 44% increase in revenue year on year. Analysts are predicting a 32% increase in revenue for the fiscal year of 2021, with an estimated $1.4 Billion in revenue. The steep but steady growth in revenue is a green light for longer term shareholders.

The strong revenue guidance is mainly driven by the impressive growth in deals announced this quarter. These contracts include the U.S. Army (USD $91 million), National Institutes of Health (USD $36 million), and USD $300 million renewal with their aerospace customer. Further, COVID has had a positive impact on Palantirs demand from cliental. Businesses have been transforming the way they operate to stay afloat in the dynamic business environment. For example, Enterprise resource planning are one of Palantirs clients who are looking to simplify the way they operate.

The risks involved for Big Data investors

The risk reward factor continues to play a key role in how investors behave in modern day investing. The risks involved with the Big Data industry revolves around the ethical use of Big Data.  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. In addition, the added volume of speculative activity on PLTR stock, we can expect the stock to remain volatile over the next 12-18 month (opinion not advice).

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 discussed 12 month analyst forecasts, revenue projections and operational growth holds arguments for the bulls and the bears. However, its worth noting Palantir are on track to reach an operating profit in 2021, as well as turn another 30% YOY gain in fiscal revenue. The risks associated with Palantir, both on an industry level and a corporate level remain high. Big Data remains a topic at large and will continue to spur up conversations regarding the misuse of it.

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.

Plug Power stock forecast for 2021 and beyond

Plug Power (NASDAQ:PLUG) stock has continued its impressive bullish run, posting an impressive 1,541% increase over the past year. The hydrogen cell developer has kept analysts busy, toppling their 12 month price target expectations. Plug Power’s sheer operating scale makes it the largest liquid hydrogen consumer in the world. The stock has been strongly influenced by Wallstreets bullish movement towards the next generation Hydrogen economy. Moreover, an industry that could provide $2.5 trillion in direct revenues in 2050 according to the Bank of America. So let’s breakdown what analysts are saying about Plug stock and analyse the companies forecasts moving into the new age of zero carbon energy.

What are analysts saying about Plug stock?

The average 12 month price target for PLUG stock is currently $37 a share. This is a realised downside of -43% according to MarketBeat data. To put the bullish sentiment shift into perspective, since our last article on PLUG in August the average price target from analysts has increased by 362%. We rarely see analysts update their 12 month price targets this consistently, suggesting Plug stock is outdoing analyst expectations.

The following price targets are examples of the growing sentiment displayed by smart money institutions:

1/12/2021 Truist – analysts initiated their 12 month price target at $60 a share. This is currently the highest standing 12 month price target from analysts.

1/7/2021 Cowen – analysts upgraded their initial price target from $35 to $50 a share. The upgrade sent Plug stock past $45 for the first time on the same day of trading.

1/7/2021 B. Riley –  analysts boosted the price target from $24 to $52 a share. The upgrade gave Plug Power investors another wind of confidence moving into 2021.

What are the forecasts moving into 2021 and beyond?

Firstly, revenue forecasts from analysts look steady moving into 2021. Revenue expectations for 2021 reflect a 35% increase YOY, from $315 million to $428 million according to Yahoo Finance data. The long term revenue expectations are bullish. By 2024, PLUG is expected to post $1.3 Billion in annual revenue according to Morgan Stanley.The Q2 results also affirmed the revenue guidance for 2024, increasing their expected operating income to $200 million and an adjusted $250 million EBITDA. In addition, the EPS predictions for 2021 are conservative, with an expected improvement of 17% YOY however this is subject to change upon further guidance.

What’s in the pipeline for Plug Power

Plug Power are moving 30% of the retail food and groceries in the United States as they are assisting retail giants such as Walmart, Amazon, Kroger, SuperValu, Wegmans, and Aryzta. The scale of PLUG is impressive, especially if you dive deeper into its vertical integration strategy. Plug Power has been able to concrete its roots deep into the Hydrogen industry, through acquiring their main hydrogen suppliers.

“With the acquisitions of United Hydrogen and Giner ELX, Plug Power is now positioned to be a global leader in generation, liquefaction and distribution of green hydrogen fuel”

Plug Power Q2 press release statement, read full document here.

Summarising Plug Power outlook

In conclusion, there is no doubt Plug Power has expansive long term potential based upon the industry forecasts and company analysis (opinion not advice). However the sustainability of the short term momentum remains up for debate. Long term investors will key in on the industry growth and any guidance changes as they approach 2024.  We will continue to follow Plug Power as they lead the charge into an exciting new era of zero carbon power.

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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.

Written by Tyger Fitzpatrick, Founder of YIG.

Li Auto stock forecast for 2021 – smart money is bullish

The new age Chinese Electric Vehicle trio NIO, Xpeng and Li Auto have made their presence felt in the US markets. Li Auto Inc. (NASDAQ: LI) debuted on Wallstreet less than 4 months ago and has since seen an incredible surge in investor cofindence. The stock has gained 114% since its listing on the NASDAQ. The EOY earnings call was bitter sweet for investors, with delivery of Electric vehicles up four fold since Q1 2020 however posting a net loss up 42% compared to Q2 2020. With so many questions to be answered with Li Auto, this article will breakdown everything investors need to know about Li Auto 2021 forecasts.

What are analysts saying about Li Auto stock?

The 12 month price targets from larger institutions include coverage from CitiGroup, Morgan Stanley, Goldman Sachs and Sanford C. Bernstein. The most up to date price target was from Goldman Sachs, who set the 12 month price target to an impressive $60 a share and a conviction buy rating. The list of coverage from these institutions on Li Auto is listed below:

  • Bank of America 1/6/2021 – listed a buy rating for the stock which had high impact on the stock price.
  • The Goldman Sachs Group 12/1/2020 – listed an conviction buy rating on Li Auto and set the price target from $20.60 to $60 a share (45% upside potential at the time of coverage). The price target impact on this coverage was high and saw Li Auto surge after the release.
  • Smith Barney CitiGroup 11/16/2020 – listed an initial coverage with a neutral rating and improved to buy. Analysts included a 12 month price target boost from $27 to $45.60 a share. Impact on the stock price was high.

What these 12 month forecasts mean for investors?

In summary, the data provided by direct institutional coverage of Li Auto does hint a positive sentiment moving into 2021. It is important to note the institutional analysts are generally more conservative regarding 12 month targets they provide in their research. Institutional analysts sway towards a Hold rating at the current trading price.

Revenue forecasts for 2021 and beyond

The revenue forecasts for 2021 and beyond look extremely positive. Firstly, the large margin for growth in the Chinese EV space has driven the demand for Li Auto deliveries. The revenue forecast for 2021 is expected to be $2.58 Billion USD which would double its expected revenue for 2020. Analysts suggest revenue could reach as high as $3 Billion USD in 2021. The deliveries are showing consistent growth with the Q3 deliveries at 8,660, a 31% increase from last quarter. The Vehicle margin also saw an increase in mark up to 19.8% from 13.7% in the previous quarter. The guidance from the companies earnings report states they forecast a 50% increase in deliveries by Q4 2020.

We delivered 8,660 Li ONEs in the third quarter, representing a 31.1% quarter-over-quarter increase and setting a new quarterly record. Cumulative deliveries in 2020 at the end of October reached 21,852 vehicles. This is a strong testament to the competitiveness of the Li ONE. For the fourth quarter of 2020, we expect our growth momentum to continue with deliveries reaching 11,000 to 12,000 vehicles.”

Mr. Xiang Li, founder, chairman and chief executive officer of Li Auto

The institutions are backing Li Auto and its 2021 forecasts

There are some very large institutions that have taken a piece of the pie from Li Auto holdings. Large institutions which have stake in the Chinese EV manufacturer include UBS Asset management, Morgan Stanley, BlackRock and JP Morgan & Chase. The largest institutional stakeholder is UBS Asset Management who currently have $103.69M or 12.55% stake in Li Auto. Closely following is Morgan Stanley with $95.90M stake or 11.6% stake in the company. Investors should pay close attention to changes in quarterly holdings from these institutions. Large swings in these holdings can give investors a good understanding into how these analysts are viewing the outlook on the company.

Evaluating Li Auto’s stock forecast moving into 2021

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

In conclusion, Li Auto alike its counterparts NIO and Xpeng have provided a new EV market for US investors to invest in offshore. Furthermore, the sentiment from analysts remains towards the bullish side, especially considering the more recent buy ratings from Goldman Sachs and BoA. In addition, fast growth in deliveries quarter on quarter is extremely positive as many EV companies are valued at a similar market cap and are yet to commercialise a single unit. The large holdings from insititutions does offer exposure to the everyday investor. This can occur when the larger stakeholders sell a significant amount of shares. If monitored correctly and an actioned at a lower entry price, Li Auto does translate some strong growth opportunities (opinion not advice).

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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 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.

Ford Motor stock forecast for 2021

Ford Motor Company (NYSE: F) is providing a glimmer of hope as we open the door to 2021. Bulls, in particular analysts, are adamant that investors should see a respectable capital gain after twelve months, but not enough to entice new investors to buy. However, the bears are not backing down as they expose the gapping debt holes in the business. This article will look to provide the bearish and bullish Ford Motor stock forecast for 2021.

Bullish Forecasts for 2021

Analysts and price forecasts

Analysts and Ford Motor price forecasts remain slightly bullish come 2021. Amongst 16 Wallstreet analysts, 9 have listed a Hold rating while 5 have determined a Buy rating. The average 12 month price target is at $9.05 a share. This suggests an upside potential of 3% from the current trading price. Here are some of the more recent price target forecasts from analysts at larger financial institutions:

12/21/2020 Benchmark – analysts at Benchmark increased their 12 month price target from $11 to $12 a share, suggesting an upside potential of 36%.

11/25/2020 Morgan Stanley – analysts at Morgan Stanley have downgraded their rating for Ford from Overweight to Equal Weight. The company also reiterated their 12 month price target at $9 a share.

10/29/2020 Bank of America – analysts at BoA boosted their 12 month price target from $9 to $10.50 a share. This suggests an upside potential of 19% from the current trading price.

Ford does have a lower end price targets as low as $4.90 (36.6% potential loss). However, it is best that investors focus on the more recent and average price targets.

Bearish forecasts

Financials

The primary area of financial concern going into 2021 is Ford’ motors rising debt levels. Ford Motor’s debt sits at $175.230 billion. When investors look at debt, they want to know two things. First, is debt, along with the D/E ratio rising or decreasing? Second, does the business have enough cash, not profit, to service its outstanding debt? In answer to the first question, Ford’s debt pile is increasing. For example, Ford’s debt is up 12% Year on Year (YoY). Not to mention their bearish D/E ratio of 567.9%. However, the main issue is that Ford’s cash reserves total $39.3 billion, creating a net debt of approximately $136 billion. If we stop here, we get the big picture in terms of debt.

However, if we hold a microscope over the liabilities for the next 12-months then we get more information. Ford Motor’s has liabilities of $92.8 billion falling due within a year. To pay down the short-term liabilities, Ford only has $39.3 billion in cash and $9.11 billion in receivables. Consequently, creating a massive liability-cash flow disparity. Investors would want to watch Ford’s balance sheet before investing, to see if the company is turning around its nightmarish debt situation. Because if the creditors came knocking today, then Ford would require a significant re-capitalisation. Thus, from a debt level, investors should not take the bearish claims lightly. Furthermore, on top of mounting debt issues Ford is reporting negative earnings. For example, For Motor’s loss came in at $2.2 billion. Therefore, the current financial situation is more of nightmare despite the dream of a brighter future.

Summary

We remind our viewers that this article is not financial advice but rather investment commentary from extensive research.

Overall, Ford Motor company is in a position to return a small gain to investors by the end of 2021. (Opinion not advice). The argument that Ford will provide a short-term gain to bag holders is not enough to conclude that the forecasts are bullish. Because beneath the surface lies debt-cash issues which significantly increases the risk for existing and new Ford investors.

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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.

Written by Patrick McLoughlin and information updated by Tyger Fitzpatrick (04/01/2021)

IPOC closes in on merger with Clover Health – now what?

Social Capital Hedosophia (NYSE: IPOC) are set to close in on their merger with Clover Health in early 2021. Evidently, this has caused a strong upswing in investor momentum in IPOC’s trading price. IPOC has gained 33% over the past week of trading and 66% for the month of December. The Special Purpose Acquisition Company (SPAC), IPOC is founded by billionaire Chamath Palihapitiya who has large plans for the healthcare company Clover. Furthermore, Chamath plans to bring strong returns for investors in years to come. With so much hype surrounding the merger and the next chapter of Clover Health, this article will breakdown everything you need to know.

Key details surrounding the merger

Firstly, the merger will finalise on the 8th of January when both companies will trade under the new ticker NASDAQ:CLOV. The transaction has an enterprise value of $3.7 Billion, which will provide $1.2 Billion in cash proceeds. Furthermore, Clover Health will receive $728 million of cash injections into the business. The additional $500 million of cash proceeds will be allocated to existing Clover shareholders. The merger aims to tap into the Medicare advantage market set to be worth $590 billion by 2025.

“We need companies like Clover to help fix our broken healthcare system. The Company’s rapid growth is a testament to the effectiveness of its tech-enabled approach, which resonates powerfully with consumers and physicians alike. I believe Clover is uniquely positioned to disrupt the entire Medicare Advantage market as well as expand into new and exciting opportunities in Original Medicare. I am proud to partner with Vivek, Andrew and the entire Clover team on the next phase of their mission to improve lives across the country.”

Chamath Palihapitiya, Founder of IPOC on merger announcement.
Conceptual business illustration with the words special-purpose acquisition company

What to expect from CLOV stock in 2021?

Clover Health is set to debut on Wallstreet on Friday the 8th of January. The debut will mark a new chapter for the healthcare innovator, especially with a healthy injection of cash into the business. Clover is the fastest growing Medicare Advantage insurer in the United States. The company serves more than 57,000 members in 34 counties and 7 states. Furthermore, with the strong revenue growth forecasted for 2021, it is clear why investors have jumped on board.

Revenue performance and forecasts for 2021

According to Woori BMO Group’s Head of Institutional Equity, Andrew Williams, Clover Health generated $462 million in revenue in 2019, an increase of 59% from 2018. According to Yahoo finance, the company is projecting revenues of $880 million with over 273,000 members in 2021. The most outstanding figure is the increase in members from what it stands today at 57,000.

The risks associated with SPAC pricing

As we have seen throughout 2020, more than a dozen popular SPAC’s have listed/merged their chosen companies on Wallstreet. The hype surrounding these high growth companies has seen extreme volatility reflecting in the share price, especially after the public listing. Investors in IPOC will need to remember that PIPE investors alongside some speculators will tend to sell their holdings after listing. The after listing volatility is something investors will need to evaluate and price into their risk strategy.

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 merger set to conclude on the 8th of January is shifting investor sentiment for all the right reasons. The strong cash injection, industry growth and strong revenue forecasts are all strong signs for Clover Health moving forward. However, its important for investors to understand the volatility brought upon SPAC listed companies after listing. For long term shareholders, this will only create a buying opportunity in their opinion.

Written by Tyger Fitzpatrick, Founder of Youth Investment Group.

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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.

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.

We’ve partnered with Stake. Use our code “YIG” to receive a free stock when funding your new account

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.

Breaking down AT&T’s stock forecast for 2021

AT&T Inc. (NYSE: T) has gripped investor interest on Wallstreet as the company took a heavy hit due to COVID earlier this year. Founded in 1983, AT&T is a US-based telecoms company. AT&T is the second largest provider of mobile services and the largest provider of fixed telephone services in the US. The telecoms giant turned over $42.3 Billion in revenue this quarter, outperforming analysts expectations. With strategic expansion plans set in place for 2021 and beyond, this article will breakdown everything you need to know as investors transition into another year of trading.

Where are analysts predicting the stock will be in 12 months?

Firstly, across the board of 25 Wall Street analysts the company is currently averaging a HOLD rating. According to MarketBeat data, the average 12 month price target set by analysts is $32.48 a share. This is an upside potential of 6%. Interestingly, the average 12 month price target has dropped 10% over the course of the past 6 months.

The following price targets are from larger institutions which allows for investors to understand what smart money is saying about AT&T:

  • 11/16/2020 Wells Fargo & Company – Analysts at Wells Fargo reiterated their underweight rating and price target of $25 a share.
  • 10/23/2020 Credit Suisse – analysts downgraded their 12 month price target from $33 to $31 a share. Credit Suisse has a neutral rating on AT&T.
  • 7/24/2020 Bank of America – BoA analysts reiterated their Buy rating on AT&T, with their 12 month price target sitting at $36 a share.
  • 7/1/2020 Morgan Stanley – analysts decreased their price target from $38 to $36 a share. The firm still maintains its overweight rating on the company suggesting AT&T will outperform its competitors.

Whats in the pipeline for AT&T stock moving into 2021?

AT&T is the parent company of Warner Media and many other subsidiaries. This classifies AT&T as one of the worlds largest media and entertainment companies operating in the US.

  • AT&T skipped the annual dividend raise for the first time since in 25 years. AT&T have set the quarterly dividend amount to $0.52 per share. The company wrote in a statement that it “expects to have the financial flexibility in 2021 to continue to invest in growth areas, sustain the dividend at current levels, and focus on debt reduction.” See the announcement here.
  • The company is also selling Crunchyroll to Sony. Crunchyroll is an anime (Japanese animation) streaming service. AT&T are planning to sell the anime streaming service to Sony Funimation for an acquisition price of $1.18 Billion in an all cash transaction. As of current Crunchyroll has 90 million registered users and 3 million paying users. Reasons behind the selling of Crunchyroll could be due to focusing on the new HBO MAX service. 

“Together with Crunchyroll, we will create the best possible experience for fans and greater opportunity for creators, producers and publishers in Japan and elsewhere.”

Tony Vinciquerra, chairman and chief executive officer of Sony Pictures Entertainment, said in the statement.

Diving into AT&T financials and the forecasts for 2021

Firstly, as a Blue Chip stock the company is generating an impressive quarterly revenue turnover. The Q3 earnings outplayed analysts predictions, with AT&T increasing their quarter on quarter revenue by 3.39%. The company also reported $8.27 Billion in Free Cash Flow for the quarter. Furthermore, AT&T expects 2020 free cash flow of $26 billion or higher for the year. Across the board of 26 analysts, the average 2021 revenue forecast is currently sitting at $173.28 Billion according to Yahoo Finance data. This is an expected annual growth of 1.60%.

Summary

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

In conclusion, AT&T stock forecast has both arguments for the Bulls and the Bears. The positive opportunities arising in 2021-2022 look to expand AT&T’s long term revenue growth. Evidently, the analysts 12 month forecasts for the stock remain conservative with the upside potential averaging below a 10% return. This can be explained as the company is considered a large cap stock, and short term growth is not generally a strong point. It is a positive sign the company will continue its dividend payout to investors, as we have seen other companies drop this expense entirely.

Written by Tyger Fitzpatrick and research completed by Zac Lorschy.

We’ve partnered with Stake. Use our code “YIG” to receive a free stock when funding your new account

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.