There’s no denying it: you should have a certain level of risk tolerance if you’re investing in electric vehicle (EV) start-up Fisker (NYSE:FSR). Don’t expect a smooth, steady ride as FSR stock is known to move fast in both directions.
Fisker’s electric SUV, known as the Ocean, is a premium vehicle that’s still in the production phase. Eventually, it could be among the best-selling electric vehicles on the market.
However, FSR stock has vast upside potential and may be worth a small investment. So, if you’re patient and can handle the volatility, then the rewards could be substantial, someday. Perhaps, you’d like more information before making a decision, and that’s understandable.
Fortunately, Fisker just released some critical information — and there are data points which might persuade you to start a position in the stock.
FSR Stock at a Glance
Believe it or not, FSR stock has gone as low as $9.61 and as high as $31.96 during the past 12 months. Typically, the stock’s floor price has been $14 but whenever the Fisker share price went down, it has bounced higher at some point.
This is not a guarantee that FSR stock will continue to rebound from that level. It’s certainly capable of going lower, so caution is always advised.
The next support level below $14 would be $10, which the stock bounced off of in May. Folks who bought at $10 actually doubled their money as the Fisker share price rallied to $20 in June.
Since the market’s initial reaction to Fisker’s recently reported earnings was negative, FSR stock might come down to a favorable buy price. Feel free to interpret the fiscal results for yourself, and consider a position if you disagree with the market’s response.
Another Important Step
Just a day prior to Fisker’s major earnings release, the company provided an update which investors should not ignore. We’re living in a time when some essential automotive materials are in short supply. This presents a challenge for electric vehicle manufacturers like Fisker.
Therefore, it’s encouraging to know that Fisker just secured a long-term battery sourcing agreement with Chinese company Contemporary Amperex Technology (CATL). Reportedly, CATL plans to supply Fisker with small and large battery packs over multiple years for production of the Ocean.
Moreover, CATL will help Fisker work toward the planned Nov. 17, 2022, start date for Ocean production, as well as the subsequent ramp-up. CATL is expected to provide leading-edge electric vehicle battery technology.
The primary high-capacity battery pack uses a lithium nickel manganese cobalt cell chemistry, while the second battery pack offers CATL’s latest cells based on lithium-ion phosphate chemistry.
CEO and Chairman Henrik Fisker observed that the sourcing deal with CATL is no small achievement.
“Securing this supply agreement with CATL is another important step in the development of the Fisker Ocean and achieving our battery performance objectives,” he said.
Critical Sourcing Phase Complete
Even if FSR stock moves lower in response to Fisker’s third-quarter 2021 data release, you can still choose to focus on the positive results. However, Fisker did not report a positive earnings number for the quarter, but that was expected. Really, the market should have priced that outcome in prior to the earnings announcement.
One positive data point from the report is that Fisker had cash and cash equivalents totaling $1.4 billion as of Sept. 30. That’s a healthy capital position for a company of Fisker’s size. Furthermore, Fisker reported that its reservations (net of cancellations) exceeded 18,600 as of Nov. 2, 2021. Plus, the company’s app registrations surpassed 72,000.
Along with those data points, the shareholders can celebrate Fisker’s progress in working towards a full production for the Ocean.
“The critical sourcing phase for Fisker Ocean is now largely complete … We are now fully engaged with industrialization, including an extensive prototyping phase that has been steadily ramping up,” explained the company’s CEO.
The Takeaway
The lack of positive earnings in Fisker’s third-quarter financial report shouldn’t have been a big surprise. If the market chooses to put negative pressure on FSR stock, this could present a buying opportunity.
There’s good news to be found, if you know where to look.
Knowing this, you can make a more informed decision about Fisker as the company makes substantial progress toward the Ocean’s expected 2022 production phase.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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