Workhorse Is Adding Small Victories, With Big Wins on The Horizon

When I last wrote about Workhorse (NASDAQ:WKHS) on Aug. 27, I stated that I thought it was a buy. I still do. Investors are still waiting on news regarding certain aspects of the company’s strategy — namely the USPS contract. But regardless of what happens there, investors should remain keen on Workhorse shares. 

A Workhorse (WKHS) W-15 hybrid electric pickup truck on display at a branding event in Flatiron Plaza in New York.

Source: rblfmr /

Investors are still going to have to wait for many quarters to effectively judge Workhorse. Press releases and other news may spike prices short-term, but Workhorse is an EV stock to hold and watch. Investors have many reasons to remain positive about the company’s prospects for massive growth. 

The USPS Contract

Investors really want updates on what is going to happen with the USPS fleet replacement contract. However, there have been none.

The lethargic pace of government action is no surprise to many readers here. Based on comments from the blog of the United States Postal Service Office of Inspector general, it seems pundits are getting fed up. At least as it pertains to the USPS contract for the fleet overhaul, and the continued lack of an award announcement. 

A lot of the comments are focused on the point that Workhorse’s vehicle is an electric vehicle. They believe that EV is the appropriate path forward for the USPS fleet. As I mentioned in my previous article, the Oshkosh (NYSE:OSK)/Ford (NYSE:F) vehicle is an internal combustion vehicle. The Karsan/Morgan Olson team vehicle is a hybrid-electric plug-in vehicle. So Workhorse is not the only green choice given that one other candidate is technically an EV. 

In any case, I still believe Workhorse is going to garner at least a portion of the initial contract award. And the contract will be awarded in tranches, meaning that the $6 billion will be apportioned over five or six years.

Investors who explicitly or implicitly state that political maneuvering is at fault for a lack of news might do well to relax. This process will be slow and isn’t likely to be winner-take-all in nature, regardless of who occupies seats in the White House, Senate and House of Representatives. Award news may not even occur before year’s end. 

Overvalued Shares 

Investors who view WKHS shares through an investing lens would likely leave it alone. There are a lot of signs which indicate that that would be a prudent strategy. Q2 sales were recorded at $92,000. No, that doesn’t have a ‘In (000)s’ appended to the end. That’s sales of $92,000, which is roughly the MSRP of a new Tesla (NASDAQ:TSLA) Model S with a performance engine. 

Anyway, investors haven’t shied away from the stock since those sales figures were revealed in August. In fact, shares have risen since then. And not to beat a dead horse, because I like the stock, but Workhorse’s price-sales ratio is ranked lower than 99.9% of industry peers. Investors don’t care at this point. 

Again, investors aren’t interested in WKHS because of its fundamentals. The potential is obvious, especially after the markets have so richly rewarded Tesla investors given its massive market capitalization. 

WKHS Stock Is Wall Street Approved

Workhorse certainly has Wall Street’s approval. Both analysts covering it say it is a buy. I don’t believe that this is just a sign of the times. After all, markets have recently watched investors plow money into bankrupt companies like Hertz (NYSE:HTZ) and other questionable businesses. Workhorse isn’t that. Nor is it just a company hoping to catch on to the EV wave.

In fact, it recently proved its merit further. 

Workhorse’s C-Series van had to undergo testing as part of the approval process following its designation as a zero-emission vehicle in California. Following testing, the company announced that it achieved a 160-mile range per charge in city conditions. This is very good news. 

This will open up sales channels to Workhorse. The company can directly approach fleet managers and companies and address their problems with concrete, proven numbers regarding range. Further, the company can use that proven range to produce case studies which can be used to address questions regarding the C-Series’ utility on a case-by-case basis. This news opens up many avenues for Workhorse to sell their vehicles into the California market, which is the biggest in the country. 

Importantly, this could go a long way in moving the needle on the Q2 sales figures of $92,000. 


As I mentioned at the outset of this article, I think Workhorse is a buy. I still believe it has to get a piece of the USPS contract whenever that is announced. Again, it isn’t a winner-takes-all situation and award winners will have to prove their worth over time. So, while positive news there will certainly spike share prices, Workhorse is also going to win by increments. That’s why announcements like the CARB range testing of 160 miles should make this an equity to consider purchasing. 

 On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

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