Both these factors call into question Evercore ISI’s confidence that QS will seamlessly gain a large share of this market. Solid Power’s batteries contain anodes, but this competitor also touts that its batteries are significantly cheaper ( 15%-35%) than lithium-ion EV batteries. One of the more formidable rivals, Solid Power (NASDAQ: SLDP), is already pursuing the licensing strategy the analyst believes QuantumScape could also adopt. The perceived cost advantages may not be as strong of a differentiator as one would think.Īs I’ve also discussed in prior QS articles, many competitors, including several other publicly traded startups, are active in the solid state EV battery space. What does that mean for shares in the near-term? Rather than climbing toward $10 per share, the stock could keep sliding to account for this uncertainty. As I argued previously it may be the mid-2020s when this happens.Īt worst, it may take a decade, or never even happen at all. First, it’s not like this company is just around the corner from reaching the commercialization stage. There are two big flaws with Evercore ISI’s bull case for QS stock. As I’ll explain in greater detail below, these flaws suggest continued caution is the best move. Yet while all of this sounds promising, you may not want to run out and enter a position in QuantumScape, just based on this research note alone.Īs mentioned above, there are some flaws to this bull case. This could enable the company to either have higher margins (if it chooses to build the batteries in-house), or lock down a lucrative licensing deal with one of the established battery makers. It’s well-known that the batteries that QuantumScape is developing (anodeless and solid-state) have significant energy density advantages over the lithium ion batteries primarily used today to power EVs.īut alongside performance advantages, according to Evercore ISI, these batteries could cost materially less to produce. In their bullish write-up on QS stock, the analysts cited possible technological advantages the company may have over competing electric vehicle battery companies. 18, the analyst team at Evercore ISI issued an “ Outperform” rating on QuantumScape, with a $10 per share price target (it’s trading around $7 today). QS Stock and Evercore ISI’s ‘Outperform’ Rating These call into question whether now’s the time to put in that buy order. Although the analyst team behind this rating makes quite a few strong points, there may still be a few counterarguments to be made regarding this new bull case. So, with these new arguments out there, has my view on this stock made a sharp shift? This latest thesis focuses primarily on the technological aspects of the overall QuantumScape story.Īdmittedly, that’s an aspect to the overall story I have discussed far less often in my past write-ups. However, with the release of a new sell-side rating on QS this week, there’s now a new convincing bull case out there for the EV battery company’s shares. In my past coverage of QuantumScape (NYSE: QS), I have cited many factors that help to build a convincing bear case for QS stock.
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