Coming into 2022 with new commitments toward zero-emission vehicles, the race in the electric-vehicle industry continues to gain pace. New companies are entering the space and the top EV makers are reporting impressive delivery numbers. Fisker (NYSE:FSR) is an automaker that did not receive much attention in the past year but it is entering the new year with high praise and a new model.
The Southern California-based EV maker is ready to take on rivals but FSR stock may not be doing justice to the praise and the fans. In November, I wrote about the stock looking promising but recommended waiting for a dip.
Now is the time to take a position, with the stock is dipping close to the 52-week low setting up for a rebound soon.
Look Closely at FSR Stock
After the debut of Fisker’s SUV in November, the company gained massive popularity. The stock hit as high as $23 in the week of the launch and then started to fall. I believe the peak was only due to the hype generated around the launch but investors who held the stock did make the most of it.
FSR stock is down 22% over the past six months and slipped from $17 to $12 in the last month. All EV stocks are down over the past few weeks. Meanwhile, it’s Ocean model won the Zero Emission Vehicle Award for its price category and while the stock is still in the red, it could rebound from here.
Despite its ups and downs, Fisker has become an EV stock to watch out for in the market that is highly dominated by large players. FSR stock will continue to remain volatile but here’s why it should be on your radar.
Massive Cash Reserves
Fisker is currently in the growth stage and it may not be in a position to compete with some of the top EV makers but the company is taking the necessary steps. It increased cash reserves to $1.4 billion through a $570 million green convertible bond offering in August. Servicing the debt could be a challenge after the company reported a third-quarter net loss of $109.6 billion which is in proportion to the increasing expenses.
Fisker expects full-year expenditures in a range between $490 million and $530 million.
At the beginning of November, reservations for Fisker stood at 18,600 vehicles. The Fisker Ocean has the line’s lowest price point of $37,499 and if all the reservations amount to sales at this price point, those would translate into $700 million in revenue. And this is only the beginning. Revenue as high as $700 million in the first year of sales could be huge for the company.
Bottom Line on FSR Stock
There is a lot of hype surrounding the Ocean SUV and it looks like the company is on schedule with the production plan. Since the company is revenue-less, it is tough to make projections about the future but it does seem like a good time to take a position in a company that shows massive growth potential. FSR stock is trading close to the 52-week low and it certainly has the potential to double in 2022.
If you missed the opportunity of buying Fisker before it went into production, it is not too late yet. The Q4 results could be huge for the company and this is when FSR stock could rebound. If you are looking to invest in EV stocks, take a bet on FSR stock before the fourth-quarter results.
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 analysis.
