As it looks to develop its line of EVs, Fisker Inc. (NYSE: FSR) is gaining attention after securing a sizable sum of cash in convertible debt which sent the stock on a 20% run as the conversion price of the notes is much higher than the stock’s current PPS. While the stock cooled down slightly following its run, FSR stock could further run this week as more details regarding the funding could be released as soon as July 12 after the offering closes. With this in mind, FSR stock remains highly shorted and a short squeeze could occur this week if the company shares positive news.
FSR Stock News
2023 Guidance
As it looks to penetrate the EV market, FSR is one of the top EV stocks to watch this year as it ramps up the production of its flagship vehicle – the Fisker Ocean. With the company planning to start delivering the vehicle this year, FSR stock presents an opportunity at current levels as the company is set to realize revenues from its vehicles this year.
With this in mind, FSR recently shared positive guidance for 2023 as it reiterated its target of producing more than 42 thousand vehicles. Although the company missed analyst estimates for revenue and EPS in 2022, this bullish guidance allowed FSR stock to run by as much as 36% since the company could be anticipating major revenues in 2023. While the stock cooled down slightly from its run, FSR stock could be well-positioned to appreciate in value in 2023 as it prepares to launch its first EV – the Ocean.
Ocean Reservations
The Ocean’s launch could be one of the major launches in 2023 as the company sold out its 2023 US allotment of the Ocean Sport and Ultra trim levels. In addition, FSR sold out is 5 thousand Ocean One launch edition globally – with buyers in 9 launch markets committing to purchasing the limited version with a $5 thousand payment.
On that note, the Ocean’s reservations have been extremely positive as reservations grew from 62 thousand at the end of Q3 2022 to 65 thousand in February. This growth in reservations indicates that FSR could be poised for major revenues this year as it starts delivering its flagship vehicle.
Ocean Production
FSR commenced production of the Ocean last November with Magna Steyr in Austria after 2 years of development. With this in mind, FSR’s production ramp includes manufacturing more than 300 vehicles in Q1 followed by more than 8 thousand vehicles in Q2. After that, FSR expects to manufacture 15 thousand vehicles in Q3 and reach a total production of more than 42 thousand vehicles by EOY. If this plan proves to be successful, the FSR stock forecast could be extremely bullish since the company could become a major competitor in the EV market with such production.
These production numbers do not include 15 fleet vehicles built for Magna in December which the vehicle manufacturer is using for data collection, improvements, as well as testing and validation of future features. In this way, FSR could introduce additional features to the Ocean this year which could result in additional reservations. Meanwhile, one of these vehicles will be shown to 15 OEMs in Sweden this month to showcase the powertrain capabilities of both FSR and Magna. In light of this, FSR could be poised for major revenue growth which could see FSR stock soar in 2023.
As part of its efforts to start delivering the Ocean, FSR expects testing for homologation – the certification for roadworthiness – to be completed by March followed by the regulatory approval process. Once this step is completed, FSR could start selling its vehicle in more than 20 countries – further adding to its potential market. As this would accelerate the delivery of the Ocean, FSR is confident it could achieve a gross margin rate between 8 – 12% while posting positive EBITDA in 2023. Considering the scale of these targets, the FSR stock forecast appears to be bullish in 2023.
PEAR Model
In addition to the Ocean, FSR is currently developing its second model – the PEAR. This model’s development is progressing well and its inaugural drivable prototype was completed last December. The top version of the PEAR is expected to achieve more than 300 miles of range with revolutionary architecture. The PEAR also includes new automotive specifications to achieve a base price of only $29.9 thousand.
As the PEAR would become one of the cheapest EVs in the market, FSR could be well-positioned to secure a significant share in this niche once the PEAR is launched. On this note, the PEAR is witnessing strong demand as its reservations are currently more than 5 thousand. Based on PEAR’s market potential, FSR could be an opportunity at current levels as it could soar in the long term.
Charging Infrastructure
With the company preparing to launch its first EV this year, FSR named ChargePoint Holdings, Inc. (NYSE: CHPT) as its North American partner for EV public charging solutions. Capitalizing on ChargePoint’s more than 210 thousand activated ports in North America, FSR’s charging infrastructure could help attract more customers to its vehicles. In this way, the company could further add to its anticipated revenues – making FSR stock an attractive growth stock for long-term investors.
Short Data
Although the company has substantial long-term potential, FSR stock could be a profitable short-term trade thanks to its short squeeze potential. According to Ortex data, FSR has a short interest rate of 40.5% with 67.7% of its float on loan. In light of its high short data, many investors are speculating FSR’s recent run following its Q4 earnings could be the result of a short squeeze. As the company is preparing to start delivering the Ocean this spring, FSR stock could witness a short squeeze that may send the stock to high levels compared to its current PPS.
*Updated May 1st, 2023
New Battery Range Achievement
In late March, FSR announced that the Ocean Extreme version of its Ocean EV lineup had a combined Worldwide Harmonised Light Vehicle Test Procedure (WLTP) range of up to 440 miles or 707 kilometers. Based on these figures, the Ocean Extreme will have the longest range of any battery electric SUV sold in Europe today giving the company a significant competitive advantage.
Ocean Delivery
As of late, FSR announced its Ocean vehicle is officially certified for sale in Europe and ready for regional deliveries which caused the stock to run almost 34% following the announcement. The company had around 5,000 vehicles of the launch edition Ocean One ordered which will start being delivered on May 5th while expecting all vehicles to be delivered by the end of September. The company is also set to initiate some deliveries of the Ocean Extreme version of the vehicle starting in Europe with the US to follow. With this in mind, the FSR stock forecast could be bullish going forward as it is set to realize revenues in Q2.
FSR Stock Q1 Earnings
FSR will report its Q1 earnings on May 9th pre-market, where analysts expect the company to report revenue of $5.2 million and an EPS of -$0.3.
*Updated June 19th, 2023
Starting Deliveries
FSR is expecting to start volume deliveries in the U.S. and Europe on June 19, which may see FSR stock run due to a short squeeze since it is highly shorted with a short interest of 34.5% and 47.5% of its float on loan. At the same time, utilization rate remains high at 100%.
The high short interest FSR is seeing is due to the company sitting on only two cars delivered in Europe since the start of May due to not acquiring the necessary certificates to start delivering its vehicles in the U.S.
After sorting its delivery issues out, FSR plans to produce 1,400 to 1,700 vehicles by the end of June, ramping up production throughout the year to produce between 32,000 and 36,000 vehicles in 2023 to meet the 65,000 reservations that FSR had as of February 2023.
It is also worth noting that Fisker Ocean has achieved an EPA range of 360 miles, the longest of any new electric SUV under $200,000 sold in the U.S. today, which may be a huge selling point for FSR since it exceeded the company’s own expectations.
FSR will also begin production on its new vehicle, the Fisker PEAR, and will showcase multiple drivable prototypes at its inaugural investor event on August 3, 2023. The success of those products will be determined by the success of the Fisker Ocean as customers start receiving their cars.
Chinese Market
After getting the U.S. release out of the way, FSR is currently looking to expand in China by the start of Q1 2024. FSR is planning on opening a delivery center in China in late 2023 and starting to deliver its Ocean SUV by Q1 2024.
While the Chinese market is a huge market for EVs since it represents almost 60% of global EV sales, it is still a very difficult market to enter. This is mainly due to the fierce competition in the Chinese market with giants like Tesla (NASDAQ: TSLA), BYD (OTC: BYDDF), and other Chinese startups competing for a piece of the pie.
If FSR can successfully penetrate the Chinese market, it can mean a lot for the company, especially since the Chinese EV market is growing rapidly, recording 55% growth in 2022 while the European market, the world’s second-largest EV market, Europe, increased by just 15%.
*Updated July 11th, 2023
Funding Deal
As is, FSR plans to sell $340 million worth of convertible notes to an unnamed investor with an option to double that amount to $680 million to fund its operation, increase production, and develop its technology. The conversion price of the notes in the deal is set at $7.8 which indicates that the investor expects FSR stock to be worth more than $7.8.
The capital obtained from this deal will be used to fund the production of a new battery pack line. Additionally, FSR intends to use the capital it obtains from this deal to fund the development and production of the rest of its EV lineup – especially the anticipated PEAR model.
As things currently stand, the deal is set to close on July 11 and the company could share more details regarding after the offering closes. This means that news regarding the identity of the investor behind the deal could be revealed by the company in a PR. If the investor turns out to be a major institution, FSR stock could witness a short squeeze given its high short interest of 43% and 60% of its float on loan which could result in the stock continuing its run over the rest of the week.
FSR Stock Financials
2022 Annual Earnings
According to FSR’s 2022 earnings, the company has $1.5 billion in assets – including $736.5 million in cash. Meanwhile, FSR has $1 billion in liabilities – of which $660.8 million are convertible notes with a conversion price of $19.7 per share. Based on this, FSR appears to be in a strong financial position as its cash balance is greater than its current liabilities of $330.8 million.
Since FSR is yet to record revenues from its main operations, the company realized $342 thousand in 2022 compared to $106 thousand in 2021 from Fisker branded apparel and goods. At the same time, operating costs increased YoY to $530.3 million compared to $329.2 million. As a result, FSR’s net loss widened from $471.3 million in 2021 to $547.3 million. Despite the company’s widening losses, FSR could be poised for significant financial growth this year as its first EV is set to launch this spring.
Q1 2023 Earnings
In its Q1 2023 report, FSR’s assets have slightly decreased QoQ from $1.515 billion to $1.504 billion, and its cash and cash equivalents decreased 11.5% QoQ from $736 million to $652 million. FSR’s total liabilities increased by 6% QoQ from $1.034 billion to $1.096 billion.
Revenue also increased 1550% YoY from $12 thousand to $198 thousand. Operating costs decreased almost 1.7% from $123 million to $121 million, which contributed to the operating loss decrease of 1.7% YoY from $123 million to $121 million, which amounted to a net loss of $120 million – a 1.7% decrease YoY.
Media Sentiment
@Eagleinvestor_ expects FSR stock to reach $8.8 soon.
@FISKERWHALE is looking forward to more FSR deliveries this year.
Technical Analysis
FSR Stock is in a bullish trend and is trading in an upwards channel. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which is a bullish indication. With that in mind, the 200 and 50 MAs appear to be close to forming a golden cross that could see the stock continue running. Meanwhile, the RSI is overbought at 79 and the MACD is bullish to the upside.
As for the fundamentals, FSR’s capital raise is bullish news for investors as it shows that the company is attractive for institutions since the investor behind the deal was willing to agree to a conversion price more than the stock’s current PPS. Since FSR is currently witnessing a pullback, the stock could retest its $6.55 support soon which could be a good entry point ahead of more news regarding the funding deal and the investor behind the deal.
FSR Stock Forecast
As things stand, FSR is well-positioned to continue developing its technology and its EV lineup thanks to the recent convertible debt deal. While the deal could contribute to dilution, it is important to note that FSR is still an EV startup and all EV startups require capital to grow their business. Considering the conversion price of the notes, the deal could be bullish for FSR’s shareholders since the investor expects the stock to become more valuable than $7.8. With news anticipated regarding the deal and the identity of the investors soon, FSR stock could be one to watch this week for a potential short squeeze.
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