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The electric vehicle bubble in general can take a break, but this is the case with Workhorse (NASDAQ: WKHS). Shares of the looming electric truck manufacturer continued to increase, with WKHS inventory emerging more than 75% last month.
And that’s no surprise. Among the company’s prospect of winning a lucrative contract with the U. S. Postal Service, the company has not been able to do so. U. S. (USPS) and its exposure to Lordstown Motors, is transparent why investors continued to make a higher offer. However, after this epic increase, are stocks still a purchase?
On the other hand, with “perfectly valuable” actions, Workhorse can simply go back to past value titles if things fail. This may be because the company doesn’t even get a component of the USPS agreement. This can also happen if Lordstown stumbled after its publication.
So, what’s the play here? If you bought at a lower price, you may need to let it roll, but if you’re just a position today, it’s more productive to play well right now.
Lordstown’s catalyst would probably be attracting more attention right now, but it’s the usPS catalyst that can also make or undo the workhorse. As I mentioned earlier, the company is the black horse contender for the NGDV contract, or next generation delivery vehicle.
What is it? It’s the large-scale mail replacement for your old fleet of mail trucks. Although not the favorite, even getting a $6 billion cake percentage would be a big win for Workhorse.
Your reasoning? Beyond the catalysts discussed above, Rusch considers Workhorse to be “the main electric vehicle delivery truck platform in the last kilometer” given its “critical design and that of its operating system”. The analyst is also positive about the company’s customers for drone delivery.
In short, this action is only a binary bet on the company’s good fortune with the USPS contract or with its interest in Lordstown, but in the short term, its participation in the soon-to-be public electric truck manufacturer will be the one it accumulates. (or decrease) actions.
As InvestorPlace’s Faisal Hu possibly did not write on September 16, while stocks have risen nearly tenfold in six months, stocks would possibly remain reasonable due to the company’s 10% stake in Lordstown Motors (LMC).
Here’s the situation: the personal corporate LMC merges with public corporate SPAC (special acquisition corporate) DiamondPeak Holdings (NASDAQ: DPHC) and, given the recent share of this blank check corporate, Workhorse’s stake may end up being worth a significant part of its existing market capitalization.
To date, LMC has earned more than 27,000 pre-orders for its flagship Endurance EV paint truck. Once delivered, those pre-orders may represent more than $1. 4 billion in revenue, but the forward-looking royalties of those pre-orders are just the beginning. Since the licensing agreement provides Workhorse with 1% of Lordstown’s revenue up to the first 200,000 cars sold, the company can earn more than $100 million.
Certainly, for an inventory with a market capitalization of $2. 8 billion, $100 million is not actually a mobile tool, but those products are the icing on the cake. That’s $100 million more than Workhorse can only reinvest in expanding its semi-EV. towing business.
Put it all together and the WKHS action seems like a great opportunity, doesn’t it?The name has much in its favor, however, it should also be noted the many considerations at stake.
Thomas Yeung of InvestorPlace recently detailed the many precautionary symptoms inherent in Workhorse and Lordstown. However, while those points would likely harm any of the corporations in the long run, Lordstown’s “history” will now affect short-term actions.
At the time of publication, Thomas Niel did not hold (or hold) any position in any of the titles discussed in this article.
InvestorPlace contributor Thomas Niel has been writing inventory research since 2016.
The All Bets message is open to Workhorse Stock despite the existing enthusiasm that gave the first impression on InvestorPlace.