Tags: electric vehicles | ev | workhorse | usps | stock

EV Maker Workhorse's USPS Saga Likely to Overshadow Results

postal service sign is seen outside the hq building
(Saul Loeb/Getty Images)

Friday, 26 February 2021 07:29 AM

When electric vehicle startup Workhorse Group Inc. posts quarterly results Monday, the numbers are likely to take a back seat — assuming executives have anything to say about losing a pivotal contract with the U.S. Postal Service.

Its stock plunged 52% in two days this week after the USPS said Oshkosh Corp., not Workhorse, would get a contract to build new vehicles for mail carriers. But then Workhorse spiked 25% Thursday after a congressman said he was trying to reverse the decision.

Volatility is nothing new for the Loveland, Ohio-based company. The shares saw major ups and downs on their way to a 3,646% rally in 2019 and 2020 combined, riding a wave of investor enthusiasm for all things related to electric cars and clean transportation. Tesla Inc.’s incredible surge toward a market value now exceeding $650 billion prompted a scramble for the next cult stock in the space.

Workhorse fit the bill despite boasting only scant revenue. Holding onto those investors may get more difficult if the growth narrative is perceived to be faltering, as showed by the exodus this week following the USPS news.

“The conversation around the contest, whether Workhorse was selected as the supplier months back, and how similar the Oshkosh truck looks to the Workhorse solution will all dominate now,” Roth Capital Partners analyst Craig Irwin said.

Given the USPS situation, analysts will hone in on other potential revenue sources.

“We will be looking at potential orders from new and existing customers that will increase Workhorse’s backlog,” RF Lafferty analyst Jaime Perez said in a phone interview. “The other key question is their cash burn rate.”

Analysts on average expect a fourth-quarter adjusted loss of 14 cents a share, on revenue of $1.2 million, according to data compiled by Bloomberg.

“As far as fourth quarter is concerned, I don’t expect big numbers, and they will probably have tepid results,” Irwin said.

© Copyright 2021 Bloomberg News. All rights reserved.


StreetTalk
When electric vehicle startup Workhorse Group Inc. posts quarterly results Monday, the numbers are likely to take a back seat - assuming executives have anything to say about losing a pivotal contract with the U.S. Postal Service. Its stock plunged 52% in two days this week...
electric vehicles, ev, workhorse, usps, stock
315
2021-29-26
Friday, 26 February 2021 07:29 AM
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