Along with the broader market, Fisker (NYSE:FSR) is seeing some nice price action today. At the time of writing, shares of FSR stock have surged nearly 5% on some key news.
The company announced today that it has officially delivered its first Ocean SUV to a buyer. The transaction took place at the company’s Center+ location in Copenhagen. This means that this pre-revenue company has finally turned the page to a revenue-generating electric vehicle (EV) maker.
Given the desire for profitability investors are displaying in the market, this is clearly good news for shareholders. Now, investors are shifting their focus to the company’s production ramp and revenue runway, and adjusting their models for when the company may achieve profitability.
Let’s dive into what to make of this announcement, and whether FSR stock is worth buying as it rips higher.
Where Is FSR Stock Headed From Here?
This delivery is of importance, for a number of reasons, for investors.
As mentioned, this news means the company has shifted from a pre-revenue EV maker to one providing revenue growth. It will be the rate of production growth that will likely matter for the stock moving forward, as investors price in what the company’s market share could be in a highly electrified Europe.
However, there are other key considerations investors will be pricing in. These initial deliveries will provide insight into the company’s initial operating margins on its vehicles, allowing for better modeling of where the stock could land moving forward. And how the company’s ramp up proceeds relative to the competition will have implications for market share and pricing power moving forward.
To be sure, there are still plenty of unknowns with respect to Fisker moving forward. The company will have to show an increasing backlog, and the ability to deliver more and more vehicles every quarter. Thus, there’s significant operational and execution risk with this company.
However, if Fisker is able to grow its market share in Europe, the company’s plans to enter the U.S. market could bode well for the stock down the road. For now, I think the excitement around this stock is reasonable, and this is one to keep on the watchlist moving forward.
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.
