Solid Power (SLDP) Valuation Revisited After Director Share Sale and Severance Plan Changes

Solid Power (SLDP) is back in focus after director Erik Anderson sold 30,000 shares and the company adjusted its Executive Change in Control and Severance Plan, raising fresh questions about leadership incentives and governance.

See our latest analysis for Solid Power.

Those governance tweaks are landing after a sharp run, with the share price at 5.12 and a year to date share price return of 147.34 percent. However, the recent 30 day share price return of negative 27.89 percent suggests momentum is cooling, even as the 1 year total shareholder return of 357.14 percent keeps longer term holders comfortably in the green.

If this mix of high potential and volatility has your attention, it could be a good moment to look beyond SLDP and explore auto manufacturers as other electric vehicle related ideas.

With revenue still small, losses heavy, and the share price well below analyst targets after a huge run, is Solid Power now trading at a discount to its solid state potential, or is the market already pricing in tomorrow’s growth?

Most Popular Narrative: 26.9% Undervalued

With the narrative fair value sitting at 7.0 against a last close of 5.12, the story leans toward meaningful upside if its assumptions land.

The analysts are assuming Solid Power's revenue will grow by 13.5% annually over the next 3 years.

Analysts are not forecasting that Solid Power will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Solid Power's profit margin will increase from -412.6% to the average US Auto Components industry of 4.8% in 3 years.

Read the complete narrative.

Curious how a loss making battery developer can still command a premium valuation narrative, driven by aggressive growth, margin recovery, and a towering future earnings multiple?

Result: Fair Value of $7 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, major OEM partnerships, scalable electrolyte production, and strong liquidity could accelerate adoption and margins more quickly than expected, challenging this undervaluation narrative.

Find out about the key risks to this Solid Power narrative.

Another View: Rich Multiples Challenge the Undervaluation Story

While the narrative fair value points to upside, the market is already paying a steep price for Solid Power’s sales, with a price to sales ratio of 49.4 times versus about 0.8 times for the US Auto Components industry and 1.3 times for peers, far above a fair ratio of 1.9 times that the market could move toward. That gap suggests meaningful downside risk if enthusiasm cools, even if the long term story plays out.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Solid Power Narrative

If these perspectives do not quite match your own view, take a closer look at the numbers yourself and craft a personalized narrative in just minutes, Do it your way.

A great starting point for your Solid Power research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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