The last year has seen significant investor interest in the electric vehicle (EV) industry, as governments worldwide announced initiatives to address climate change concerns. The future of the global EV market looks promising, with big opportunities for growth in the battery, hybrid, and plug-in-hybrid EV markets. According to Globe Newswire, the global EV market is expected to…
grow at a CAGR of 29% from 2021 – 2026.
However, investors’ ongoing rotation away from the EV stocks to cyclical industries to capitalize on the impending economic recovery is driving a sell-off of overvalued EV stocks. In addition to valuation concerns, rising global competition in the EV space and a semiconductor chip shortage are raising investor concerns regarding the industry’s near-term prospects.
Fisker Inc. (FSR – Get Rating) and Nikola Corporation (NKLA – Get Rating) have already lost significant value since hitting their all-time highs and will likely suffer further declines because they still look overvalued at their current price levels considering their bleak near-term growth prospects. So, we think it could be wise to avoid these stocks now.
Headquartered in Manhattan Beach, Calif., FSR designs, develops, manufactures, and sells electric vehicles (EVs). It also provides mobility solutions. Also, the company’s electric sport utility vehicle (SUV) — Fisker Ocean — is available to consumers through a leasing package.
FSR’s operating loss for the fourth quarter, ended December 31, 2020 was $31.31 million. Its net loss was $12.04 million compared to $3.02 million in the fourth quarter of 2019. Also, its loss per share for the quarter came in at $0.05 compared to $0.03 in the prior-year period.
Analysts expect FSR’s EPS to decline 112.5% in its fiscal year 2021. In terms of forward price-to-book ratio, the stock is currently trading at 4.93x, which is 29.4% higher than the 3.81x industry average.
FSR has declined 50.4% since hitting its all-time high of $31.96 on March 2, 2021. It is currently trading 56.2% below its high.
FSR’s POWR Ratings are consistent with this bleak outlook. The stock has an overall D rating, which equates to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
The stock has a D Grade for Sentiment, Stability, and Value. Click here to access FSR’s ratings for Quality, Growth, and Momentum as well.
FSR is ranked #42 of 53 stocks in the Auto and Vehicles Manufacturers industry.
Founded in 2015, NKLA provides zero-emissions transportation and infrastructure solutions and designs and manufactures battery-electric and hydrogen-electric vehicles. The company operates primarily through…
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