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Electric vehicle maker Fisker, Inc. (NYSE: FSR) proves that even your competitors can be your friends.
A 15 percent gain on Jan. 27 fueled Tesla shares and many EV peers after it announced better-than-expected fourth-quarter earnings — a much-needed jolt to a sector hit by skids in 2022.
Fisker’s advance also came with the highest trading volume the stock has seen since October 2021. On Friday, 28 million shares traded more than five times the 90-day moving average.
Is this the turning point Fisker has been waiting for? Maybe so.
In the year On October 28, 2021, volume increased by 30 million shares on the news President Biden will soon meet with lawmakers to introduce his landmark infrastructure bill. After three weeks, the former SPAC was running more than 60%.
While continued government support for EV charging stations and more positive Tesla headlines will no doubt support Fisker’s stock, the company should finally be able to get back on its feet. Whether or not a sustained rally follows last week’s blip will ultimately depend on how the market views Fisker’s fundamentals and technicals.
How are the Fisker basics?
Based on the earnings release, Fisker’s fundamentals are weak. Sales are minimal and the company is running at a heavy loss. To be fair, though, this is not uncommon among EV startup players who have yet to book a real income.
On the other hand, the balance sheet is very healthy. Fisker’s debt-to-capital ratio is 53%, which gives it the opportunity to pursue growth initiatives and, if necessary, enter the credit markets. Even Ford and General Motors are more lenient.
But Fisker’s growth prospects make its current financial statements less relevant to long-term investors. Can the company carve out a significant slice of the global EV market, with Bloomberg forecasting that it will deliver 36% more vehicles by 2023, on track for explosive multi-year growth?
This largely depends on the success of Fisker’s first offerings, including the much-anticipated Ocean. Production of the all-electric SUV begins in November 2022 at the Austrian plant to meet over 63,000 ($37,499 and up) reservations. In the US, two ocean liners have been sold for 2023.
Fisker’s follow-up offering for the future of urban living is the PEAR EV, which starts at $29,900 and is scheduled to ship in 2024. . If PEAR and Ronin’s consumer adoption is similar to Ocean’s, the quality of Fisker’s earnings statement could increase significantly.
What do the charts say about Fisker stock right now?
Fisker’s price pattern has been largely sideways over the past few months, but that’s a good thing. The stock has stabilized after finding long-term declines and support levels. The $6.50 level is a three-time low since October 2022, good for a potential reversal springboard.
Another scary development is Fisker’s 50-day moving average retracement. Since he did so convincingly, the chances of a long recovery are good.
Although the market was quick to take recent gains as the stock rose above $8.00 (and the daily chart’s upper bowling band), several other indicators suggest it has room for long-term expansion. The Relative Strength Indicator (RSI) is a modest 58, and the MACD has just begun its key crossover. Fisker’s ability to maintain momentum ahead of its upcoming earnings release will be important to watch.
Is Wall Street Bullying Against Fisker?
Since Fisker reports third-quarter results in early November 2022, a fourth-quarter update is likely soon. Last quarter’s report didn’t go over well, mainly because there wasn’t a favorable stock market for high-flying pre-revenue EV players. Despite positive updates around lower spending levels and oceanic pre-orders, Fisker gapped lower and eventually hit a new 52-week low.
Wall Street turned bearish on Fisker after its Q3 report despite a strong macro backdrop. Four firms have called it a buy before the end of the year, with a price target of $10 to $21.
Last week, Morgan Stanley crashed the party by downgrading Fisker to sell, a rating it also gave to Lucid Group. Although Fisker and Lucid were two of the biggest gainers on Friday, this bearish stance was highly untimely.
Most analysts remain in the Labor camp, and it’s easy to see why. Early demand for the Ocean is strong thanks to SUV quality and affordable pricing (note: the 2022 Tesla Model X SUV, with roughly the same driving range, starts at $120,990).
If Fisker continues to appeal to the mass market and production continues on schedule, the stock could be in for a traffic gain.
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