By and large, there’s much to like about Hyliion (NYSE:HYLN). If you’re seeking something different in the electric vehicle niche, you really should consider Hyliion stock instead of, or in addition to, the more popular names in that sector.
What differentiates Hyliion from other electric vehicle contenders is the company’s proprietary intelligent electric powertrain. Impressively, Hyliion’s powertrains use machine-learning algorithms to optimize their emissions performance and efficiency.
Hyliion’s powertrains could have a transformative impact on the electric trucking industry. Overall, it’s commendable that Hyliion seeks to achieve carbon-negative status.
With the company’s tech-augmented powertrains, this objective is more than just a pipe dream.
Yet, even with the company’s ambitions and its value-added powertrain technology, Hyliion stock hasn’t maintained its bullish momentum from earlier in the year. So, the billion-dollar question is: should prospective shareholders buy the dip, or is this a stock to avoid?
A Closer Look at Hyliion Stock
Market technicians probably aren’t going to like classic head-and-shoulders pattern in Hyliion stock. Specifically, the stock spiked up to $31 in June and came back down, then surged to $55 in September and came back down, and finally rose to $27 in November and again came back down.
On the close of the trading day of Nov. 11, Hyliion stock settled at $17.32. Investors can view this situation in one of two ways. The bearish thesis would be that the bulls attempted to lift and hold the stock three times, and failed in all three attempts.
In contrast, the bullish thesis would be that anyone sitting on the sidelines now has another opportunity to own Hyliion stock at a more reasonable price point before it takes off again.
But, will it take off again? That depends on the company’s prospects for growth and profitability. In order to believe in Hyliion stock, ultimately you have to believe in the future of the company and its innovative technology.
If you’re looking to invest in a company that’s already posting great sales numbers, Hyliion doesn’t fit that description. As Hyliion CEO Thomas Healy readily admitted, his company is still making “progress toward commercialization,” so to speak.
Healy is a visionary entrepreneur, and Hyliion stock investors must also have a forward-facing outlook. Don’t expect the company to sell its powertrain solutions next week or even next month. As they say, Rome wasn’t built in a day.
Besides, businesses are still dealing with the global Covid-19 pandemic. This threw a wrench in the works for start-ups like Hyliion in 2020, and hopefully 2021 will be a much less challenging year for the automotive industry.
Solid Capital Position
Importantly, Healy is confident that the market for Hyliion’s powertrain systems is ready and waiting.
“We are experiencing strong interest for our solutions and are utilizing our resources to develop a scaled infrastructure that will be able to support demand from this $800 billion market,” Healy explained.
The company’s greatest accomplishment so far, really, is going public. It wasn’t very long ago that Hyliion came to the market through a reverse merger with a shell company, Tortoise Acquisition.
That, in itself, is a complex process. And as a newly public company, it’s understandable if Hyliion is still experiencing some growing pains.
At least the bulls can say that Hyliion is well capitalized. As of Sept. 30, the company held $7,565,000 in cash and cash equivalents (unaudited). This capital position should stand Hyliion in good stead as the company works towards its upcoming product milestones.
The Bottom Line on Hyliion Stock
Appreciating the potential of Hyliion stock requires a certain measure of faith and vision. Suffice it to say that this stock probably isn’t for everyone.
Still, there could be a great dip-buying opportunity with Hyliion stock. This might be the electric powertrain leader of the near future, and an early stake at a low price could turn out to be a well-timed investment.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.