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Fisker Sets High Targets, But Investors Should Exercise Patience 

With nations committing to a greener, healthier tomorrow, there is a surge in the number of electric vehicle manufacturers in the world. Fisker (NYSE:FSR) stock is making a lot of noise in the market and maybe for the right reasons.

The Fisker logo hangs on display at the November 2011 International Auto Show.
Source: Eric Broder Van Dyke / Shutterstock.com

A lot of people believe that Fisker could give stiff competition to Tesla (NASDAQ:TSLA) as the company is on its way to launch its first model soon. FSR stock debuted in October 2020 at almost $9 per share and now trades at more than $15. I do not think it will move much further over the next few months. 

The company has not generated any revenue yet. It has also not managed to build a solid vehicle either. Fisker is only enjoying the attention with the right marketing techniques but when it comes to fundamentals and products, it is nowhere.

FSR stock may rise after the production begins but until then, do not pin your hopes on it. I do not think Fisker is a safe bet right now. Let’s dig deeper into the reasons why you should stay away from FSR stock.

Nothing To Look At 

Fisker is certainly an appealing company, and it is making news with strong partnerships and high growth prospects. The company is aiming to offer four vehicle lines and achieve 200,000 to 250,000 in unit sales by 2025. This is a huge number and until the production starts, nothing can be predicted about it. The company may have sales reservations but whether the consumers are happy with their vehicle or not, only time will tell. 

The first vehicle line will start off assembly lines in the fourth quarter of 2022 and Fisker has already started working on the second. I think that the company is focusing on more than one vehicle unnecessarily. Like several other EV makers, Fisker should first focus on the first vehicle and launch it before working on the next in line. 

I am not saying that the vehicle will be a failure. It could be a huge success and could give stiff competition to other auto manufacturers, but you need patience to see this happen. We must take into account the chip shortage that the entire EV industry is facing. It could also slowdown the progress of Fisker. 

Until and unless manufacturing begins and we see Fisker cars on the road, there is nothing to look at FSR stock. The stock will not show much movement until the production reaches an advanced level and it is best to wait for it to happen. It has not brought any sales and has nothing to sell at this stage, why bet your money on speculation?

The Bottom Line on FSR Stock

I am bearish on the stock, but Wall Street analysts have mixed opinions. Jeoffrey Lambujon, Tudor Pickering analyst initiated coverage on FSR stock with a buy, while BofA analyst John Murphy downgraded the stock from buy to neutral with a price target of $18. 

Investors should consider the fierce competition in the EV industry, and it is only going to increase by the end of 2022. EV makers are making strong moves to capture a larger market share and increase sales. Fisker is nowhere in the competition at this stage and when it enters, the market may have become even more crowded.

If you are keen on investing in EV stocks, there are several other options to consider. Stay away from FSR stock until it starts production because it will not move much over the next few months. Marketing efforts and partnerships can only take the stock to a certain high, but it will eventually dip.

Now is not the right time to put your money in FSR stock. 

On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analyses.


Article printed from InvestorPlace Media, https://investorplace.com/2021/09/fsr-stock-high-targets-but-investors-should-exercise-patience/.

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