FSR Stock Is Stalling Out Despite a New Battery Deal. Here’s What to Know.

Advertisement

There’s certainly a lot of excitement in the electric vehicle (EV) world today. From the upcoming initial public offering (IPO) of startup Rivian to hopes for an infrastructure deal (which investors continue to patiently wait for), the EV space is one that has been relatively robust. For investors in Fisker (NYSE:FSR) and FSR stock, this has generally provided some momentum this past quarter.

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

Since hitting a low below the company’s SPAC IPO price of $10 in May, shares of FSR stock have rebounded nicely. Currently, Fisker has seen its valuation grow to more than $5 billion, despite having yet to produce any vehicles.

Indeed, it appears the market remains bullish on its offerings.

With Fisker’s upcoming electric Ocean SUV model slated for reveal soon, there’s a real catalyst on the horizon. However, investors have another reason to be bullish on FSR stock today. Let’s dive into the catalyst, and why Fisker is seeing the price action it is right now.

FSR Stock Down Ahead of Earnings, Despite Key Catalyst

Today, Fisker announced the company has secured a long-term battery supply agreement. This agreement is with Contemporary Amperex Technology (CATL), a Chinese battery maker.

This deal provides for two different battery packs for the Ocean SUV. Fisker has repeated that it believes it’s on track to deliver its Ocean SUV in a year’s time (November 2022). That’s a long way out, but this battery deal sure does seem to supply some stability and flexibility to the company’s production timelines.

Flexibility and stability are good things. Accordingly, one would think this news would boost FSR stock today.

However, it’s important to keep in mind that Fisker reports earnings after the bell. Given the supply chain issues we’ve seen materialize this quarter, investors seem to be taking a rather dim view of EV startup Fisker today.

What will ultimately be reported remains to be seen. However, the forecast is for (unsurprisingly) zero revenue, and a loss of 37 cents per share. Frankly, these earnings don’t appear to be meaningful from a numbers perspective. However, investors will be looking for key production updates and management commentary to base their outlooks for this stock on. And right now, the overall outlook and sentiment among investors appears to have dipped.

On the date of publication, Chris MacDonald 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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


Article printed from InvestorPlace Media, https://investorplace.com/2021/11/fsr-stock-is-stalling-out-despite-a-new-battery-deal-heres-what-to-know/.

©2024 InvestorPlace Media, LLC