If it Can Deliver, Fisker is Worthy of a Speculative Wager

Disingenuousness is one of the attributes I can’t stand. Therefore, I’m going to give it to you straight. I’m probably never going to buy an electric vehicle. But if push ever came to shove, I’d go with Fisker (NYSE:FSR). In some ways, I’m halfway there as I personally own a small stake in FSR stock.

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

Because I have some skin in the game, let me be the first to tell you that you want to take what I have to say with a grain of salt. That’s not to say that I’m going to deliberately disseminate a distorted image of FSR stock. Clearly, with shares down more than 30% on a year-to-date basis, this is a highly speculative venture.

Still, if you have some loose change underneath the sofa, you might want to consider throwing some at Fisker. True, the EV market is competitive as all heck, with seemingly new rivals popping up every quarter. However, the company at the heart of this discussion has what no one else does: legendary automotive designer Henrik Fisker.

At a time when EVs are starting to look the same, Fisker the man provides much needed distinguishment for Fisker the company. Its Ocean SUV is simply gorgeous, featuring a bold chassis accentuated with modern European aesthetical motifs. To me, it invokes a cross between a Land Rover and a Jaguar, with perhaps a touch of Teutonic sensibilities throw in.

Again, I’m not an EV type of guy (nor do I care for SUVs that much, though I own one). But there’s something special about the Fisker Ocean. Having just now seen more photos (both exterior and interior shots), I might walk back my opening statement.

Even without coercion involved, I could slowly start to see myself in a Fisker.

Attractive Pricing May Help Lift FSR Stock

Despite my praises for Henrik Fisker, one of my longstanding concerns about FSR stock was the underlying pricing. No, not for the equity unit, though that matters too. Rather, in this case, I’m referring to the Ocean. The initial starting price below $40,000 seemed a bit ambitious.

And yet, based on what I’m seeing from its website, the company appears committed to release the base-trim Ocean at $37,500. If that doesn’t change, we could be talking about a gamechanger. For instance, consider the Mini Hardtop 2 Door Electric, one of the cheapest EVs available at $30,750.

The thing is, though, the Mini Electric is an ultra-compact vehicle that, while punching above its weight, will start to get impractical. However, by spending less than seven grand, you can upgrade to not only an arguably better vehicle but to a radical paradigm shift.

With the Ocean, you have a well-balanced SUV with smoking good looks and practicality up the wazoo. Plus, the Mini only has a range of 114 miles on a full charge, whereas the base-trim Ocean will get you 250 miles. Combined with Fisker’s 10-year/100,000-mile warranty for the powertrain and battery, you’d almost be foolish not to consider upgrading to the Ocean.

Therefore, FSR stock can benefit from the underlying company stealing market share from the more modest end of the income spectrum among EV buyers (which admittedly is high compared to combustion cars). But the beautiful factor is that Fisker can also steal share from those with expensive tastes.

For $50,000, drivers can enjoy the benefits of the Fisker Ocean Ultra, which among other components provides all-wheel drive, a “hyper” drive mode and increased range to 340 miles. Now we’re talking serious stats which may swing the needle for FSR stock.

Risky, Yes, but Also Compelling

For customers that really want the most premium experience, they can opt for the Ocean Extreme or Ocean One. Both trims cost the same — $69,000. In addition to a bump up in range to 350 miles, the powertrain is more advanced, featuring a rear disconnect smart traction system.

To be sure, it seems that all Fisker trim levels will look the same on the outside (and perhaps the in). I hope that’s not the case because that might lead to a cannibalization of sales. As well, you don’t want everybody to pick the cheapest Ocean, thereby eschewing the higher-margin trim levels. That’s a risk related to Fisker’s aesthetics that you need to keep in mind with FSR stock.

Still, that could ultimately prove to be a minor concern. Beauty is in the eye of the beholder but I’m genuinely convinced that there’s nothing on the electric road that looks like the Fisker Ocean — and I mean that in the best way possible.

Again, the market is skeptical about FSR stock and you do have to respect that. But if you’re a patient investor, this is a speculative bet that could pay off quite handsomely in the long run.

On the date of publication, Josh Enomoto held a LONG position in FSR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Article printed from InvestorPlace Media, https://investorplace.com/2022/02/if-it-can-deliver-fsr-stock-worth-risk/.

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