Monday - DA Davidson has adjusted its price target for Workhorse Group (NASDAQ:WKHS), a company specializing in electric delivery vehicles, to $0.50 from the previous $1.00. The firm maintains a Neutral rating on the stock. The revision follows the company's fourth-quarter results of 2023, which indicated progress towards high-volume production.
The analyst noted Workhorse's achievements, highlighting the first two orders received for its W56 Step Van, along with advancements in the production of the W4 CC and W750 products. Positive developments were also recognized in the improvement of the upfitter situation, based on a follow-up call.
Subsequent to the call, Workhorse Group took a step to secure its financial position by entering into a convertible note agreement. This move is intended to provide the company with sufficient liquidity, albeit at a cost. Despite these developments, the analyst pointed out that Workhorse Group remains cautious, not offering specific volume projections or guidance.
The firm's decision to maintain a neutral stance is influenced by the company's reserved approach to disclosing its operational targets and forecasts. The analyst suggests that while Workhorse Group is making strides, it is prudent to observe from the sidelines as the market landscape evolves and other competitors advance.
InvestingPro Insights
Recent analysis from InvestingPro highlights a mixed financial landscape for Workhorse Group (NASDAQ:WKHS). With a significant increase in revenue growth over the last twelve months, Workhorse has shown a promising sales trajectory.
Still, the company's financial health is under scrutiny, as indicated by a negative P/E ratio and a gross profit margin that has dipped well below zero. This suggests that while top-line growth is strong, profitability remains elusive.
InvestingPro Tips reveal that analysts are not expecting Workhorse to be profitable this year and are concerned about the company's cash burn. The stock has experienced substantial volatility, with a notable return over the last week but poor performance over the last month and beyond. This aligns with DA Davidson's cautious outlook, acknowledging progress but recognizing the need for prudence given the company's financial challenges and the competitive environment.
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