Lordstown Motors: Successful Execution Could See Shares More Than Triple

When naming its flagship electric truck Endurance, it’s unlikely Lordstown Motors (RIDE) had future suffering investors in mind. But ironically, the name does reflect the stoicism needed to weather the stock’s woeful performance in 2021. Year-to-date, RIDE shares have only gone downhill – by 72%.

Moreover, a look at the pre-revenue company’s latest quarterly results might not seem reassuring. A net loss of $108 million in Q2 resulted in a loss of 61 cents a share, a 10-cent miss vs. the consensus estimate. The cash position also dwindled to roughly $366 million, down from $587 million at the end of the first quarter.

But as RIDE has no sales yet, investors could be willing to forgive such losses, as long as the outlook promises an improvement. And here things might be picking up.

The company said it is on track to begin producing vehicles by the end of September and wrapped up Beta production during the quarter, with vehicles presently in various stages of testing (FVMSS and crash safety).

Following vehicle validation and regulatory approvals in December and January, a selection of early customers should receive their vehicles in 1Q22, with commercial deliveries beginning in Q2, and ramping up meaningfully by next year’s second half.

RIDE also announced big strides forward for the Lordstown facility, noting the plant is production-ready with retooling of stamping, assembly, body, and paint shops accomplished. Furthermore, the battery line is now fully commissioned, and the first electric hub motor line is also undergoing installment.

BTIG’s Gregory Lewis says the company is “dotting the I’s and crossing the T’s towards production,” and believes success hinges on the timely execution of its plan for the electric pickup truck.

“We believe the key to RIDE’s success as a new entrant into the commercial pickup market will be its position as a first mover with an EV pickup truck solution,” the analyst said. “We expect pre-orders to convert to orders, which should enable the Company to ramp production to ~15,000 vehicles in 2022 and then increase production to ~50,000 vehicles in 2023.”

Lewis rates RIDE a Buy, and his $20 price target is ultra-bullish, suggesting shares will climb by 258% in the year ahead. (To watch Lewis’ track record, click here)

The BTIG analyst, however, is in a party of one. His Buy rating is obscured by 4 Sells and 3 Holds, culminating in the stock’s Moderate Sell consensus rating. Offering somewhat of a conundrum here, is the bullish average price target, aided by Lewis’ positive stance; the figure clocks in at $8.71, implying 12-month upside of 56%. (See RIDE stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

William Murphy

William Murphy

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