Stock Analysis

Breakeven On The Horizon For Workhorse Group Inc. (NASDAQ:WKHS)

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NasdaqCM:WKHS
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We feel now is a pretty good time to analyse Workhorse Group Inc.'s (NASDAQ:WKHS) business as it appears the company may be on the cusp of a considerable accomplishment. Workhorse Group Inc., a technology company, designs, manufactures, builds, and sells battery-electric vehicles and aircraft in the United States. With the latest financial year loss of US$37m and a trailing-twelve-month loss of US$210m, the US$2.9b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Workhorse Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Workhorse Group

Workhorse Group is bordering on breakeven, according to the 7 American Auto Components analysts. They expect the company to post a final loss in 2021, before turning a profit of US$267k in 2022. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqCM:WKHS Earnings Per Share Growth January 20th 2021

Underlying developments driving Workhorse Group's growth isn’t the focus of this broad overview, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Workhorse Group currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Workhorse Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Workhorse Group's company page on Simply Wall St. We've also put together a list of important factors you should further research:

  1. Valuation: What is Workhorse Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Workhorse Group is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Workhorse Group’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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What are the risks and opportunities for Workhorse Group?

Workhorse Group Inc., a technology company, engages in design, manufacture, and sale of zero-emission commercial vehicles in the United States.

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Rewards

  • Revenue is forecast to grow 82.25% per year

Risks

  • Makes less than USD$1m in revenue ($-424K)

  • Shareholders have been diluted in the past year

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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