Will QuantumScape stock go to $6? 1 Wall Street analyst thinks so.
The gloomy atmosphere in the electric vehicle industry has also affected next-generation battery developers, but it is providing an opportunity to secure shares at a low price.
The turbulent electric vehicle (EV) sector has been providing plenty of up-and-down drama lately for investors, who have to be very selective these days. But what they will have to choose from, according to at least one analyst, is the next generation of battery manufacturers. Quantumscape (QS -1.97%). Check out his latest stuff if you want.
need a better battery
QuantumScape is currently developing EV batteries with higher energy densities than typical products available today. In a broad sense, this means batteries that can deliver significantly longer range per charge.
The company’s power pack has not yet been built into any car. But they are making progress. Last March, QuantumScape said it had begun shipping prototypes of these battery cells to select customers.
One of QuantumScape’s biggest strengths, according to optimistic but cautious analysts, is that it is well funded and is not under extreme pressure to deliver a revenue-generating product right away.
“With more than $1 billion in liquidity and improved cash burn over the past several quarters, QS has extended its current cash runway through 2026 as the company continues on its commercial expansion path,” said Jordan Levy of Truist Securities. Research notes.
In that analysis, Levy reduced his price target from $8 to $6 per share. He thinks the pessimistic news about the EV industry as a whole will somewhat limit stock gains for the time being. But even if he lowers his target, he expects an upside of 12% from the recent closing price.
There’s a lot of hard work going into QuantumScape
It seems to me that QuantumScape is determined to prove that it can deliver on the promise of better batteries for EVs, a product the industry desperately needs.
Current range-per-charge figures aren’t impressive enough on their own to convert the car-buying public to EVs. The company has a huge opportunity ahead of it, and given its low stock price and the cash cushion that Levy mentioned, we think becoming the next big battery company is a good bet.
Eric Volkman has no positions in any of the stocks mentioned. The Motley Fool holds a position in and recommends Truist Financial. The Motley Fool has a disclosure policy.
