Will 2024 be the year that electric vehicle battery technology company QuantumScape (NYSE:QS) breaks through with a fully commercialized product? Is QuantumScape on the cusp of delivering awesome revenue and profits? Anything’s possible, but don’t get your hopes up. According to my QS stock analysis, you definitely shouldn’t start a share position unless you’re a risk-tolerant speculator.
I’ve warned investors about QuantumScape before, and while there’s new information to report, my bearish stance hasn’t changed. I would be glad to see QuantumScape’s battery-cell technology in thousands or millions of cars on the roadways soon. This just doesn’t seem like a probable outcome, and QuantumScape’s capital position makes it difficult to invest in the company with confidence.
Will New Leadership Catalyze QS Stock?
Usually, QuantumScape’s press releases page offers little more than quarterly earnings announcements. However, QuantumScape delivered an important piece of news on Feb. 14 besides the company’s quarterly report (which I’ll get to in a moment).
Specifically, QuantumScape appointed a new CEO, Siva Sivaram, to replace Jagdeep Singh. This might sound like a major change for the company, but Sivaram isn’t a new face at QuantumScape.
That’s because Sivaram is already QuantumScape’s president, so now he’ll be the president and CEO of the company. This event doesn’t feel as if QuantumScape is starting a new chapter or taking a new direction.
If an activist investor installed a new chief executive, that would be a different story. That’s not the case, however, and while we’ll all have to wait and see what Sivaram does as QuantumScape’s new CEO, I suspect that there won’t be any major changes at the company this year.
QuantumScape’s Less-Than-Ideal Financials
Besides announcing the CEO changeover, QuantumScape also released its fourth-quarter fiscal 2023 results on Feb. 14. I read the company’s shareholder letter all the way through multiple times, in hopes of a specific timeline to full product commercialization.
Unfortunately, this wasn’t anywhere in QuantumScape’s shareholder letter. What I found, however, was a slew of unappealing financial data points.
First of all, QuantumScape’s position of cash and cash equivalents dwindled from $235.393 million at the end of 2022 to $142.524 million at the end of 2023. There weren’t any sales or revenue to speak of. However, QuantumScape’s total operating expenses grew from $113.434 million in 2022’s fourth quarter to $124.64 million in Q4 of 2023.
QuantumScape’s net earnings loss increased from $109.053 million in the year-earlier quarter to $113.339 million in 2023’s fourth quarter. On top of all that, QuantumScape missed Wall Street’s call for a Q4 FY2023 loss of 19 cents per share. The company actually ended up losing 23 cents per share.
QS Stock Analysis: Too Much Risk for Sensible Investors
QuantumScape’s poor financials might be easier to tolerate if the company had a near-term, specific timeline to full commercialization for its products. Yet, QuantumScape’s latest shareholder letter didn’t provide such a timeline.
Maybe, QuantumScape’s new CEO will mark a major turning point for the company. However, this seems unlikely. So, my QS stock analysis finds that only speculators should consider wagering their hard-earned money on this ultra-risky asset.
On the date of publication, David Moadel 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.
