Workhorse Group Inc.’s (NASDAQ:WKHS): Workhorse Group Inc. designs, manufactures, builds, sells, and leases battery-electric vehicles and aircraft in the United States. With the latest financial year loss of -US$41.2m and a trailing-twelve month of -US$31.3m, the US$29m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on WKHS’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for WKHS.
According to the 2 industry analysts covering WKHS, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$13m in 2020. So, WKHS is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which WKHS must grow year-on-year. It turns out an average annual growth rate of 72% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, WKHS may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for WKHS given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with WKHS is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and WKHS has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are too many aspects of WKHS to cover in one brief article, but the key fundamentals for the company can all be found in one place – WKHS’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:
- Historical Track Record: What has WKHS’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Workhorse Group’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.