The emerging global supplier of hydrogen fuel cell EVs Hyzon Motors Inc. (NASDAQ: HYZN) stock is in a dire state since its stock is down more than 60% YTD. HYZN also suffers from cash burn problems, which may pose a problem for HYZN’s future. However, HYZN stock could be set for a rebound soon thanks to its recent deal with Chevron Corporation (NYSE: CVX) which might improve the company’s long-term prospects.
HYZN Stock News
Most EV stocks are down since the start of the year due to production cuts and other supply chain problems and HYZN stock is no different. HYZN stock is down more than 60% YTD and almost 95% since its IPO back in 2020.
Unsustainable Cash Burn
The reason for HYZN’s steep drop could be due to its extremely high cash burn rate with its current cash balance sufficient to keep the company operating until mid-2024 at its current cash burn rate. Based on this, HYZN may resort to diluting its shares to raise capital which might see the stock further plummeting. On that note, HYZN is facing the risk of being delisted as it is not compliant with the NASDAQ minimum bid price requirement of $1.
A Ray Of Hope
It is not all doom and gloom for HYZN, though as earlier this year HYZN collaborated with oil giant Chevron and Raven SR to produce hydrogen from green waste in Northern California. The new facility is expected to become operational in Q1 2024 and will be owned by a newly formed company – Raven SR S1 LLC – which is 50% owned by Chevron, 30% owned by Raven, and 20% owned by HYZN. Through this facility, HYZN would be able to provide full-service vehicle leases which would lower the fleet’s total cost ownership – increasing demand for HYZN’s hydrogen fuel cell EVs. At the same time, collaborating with an industry giant like Chevron is proof that HYZN’s future prospects may be bright.
HYZN can also capitalize on the public’s consciousness that hydrogen cells are more environmentally friendly, since lithium mining, which is essential for electric batteries, is extremely harmful to the environment. With HYZN Q1 2023 earnings coming up on June 8, if HYZN can show improvements regarding its cash burn, it may change investors’ perception of HYZN stock.
Short Data
If that is the case, HYZN stock could witness a short squeeze since it currently has a 23.6% short interest, 27% of its float on loan, and a 100% utilization rate. Based on these figures, HYZN stock may soar on positive financial results, however, it is worth noting that HYZN may file for an extension since it has a history of not filing its earnings on time.
HYZN Stock Financials
In its 2022 annual report, HYZN’s assets decreased 25% YoY from $496 million to $374 million, and its cash and cash equivalents decreased 86% YoY from $445 million to $60 million. HYZN’s total liabilities decreased by 58% YoY from $160 million to $67 million.
Revenue also increased 4700% YoY from an $80 thousand loss to $3.7 million. Operating costs increased almost 86% from $98 million to $176 million, which contributed to operating loss increasing 79% YoY from $99 million to $172 million. As a result, HYZN’s net loss increased 220% YoY to $54 million.
Media Sentiment
@LamiralBourse believes that HYZN stock will either run or plummet with nothing much in between.
Technical Analysis
HYZN stock’s trend is neutral with the stock trading in a sideways channel between $0.55 and $0.64. Looking at the indicators, the stock is trading below the 200, 50, and 21 MAs which are bearish indications. Meanwhile, the RSI is neutral at 41 and the MACD is approaching a bullish crossover.
As for the fundamentals, HYZN has a near-term catalyst in its Q1 2023 earnings and a long-term catalyst which is the new facility commencing operations in Q1 2024. With the stock trading near support, investors could find the current PPS a good entry point in HYZN stock ahead of its catalysts.
HYZN Stock Forecast
HYZN is currently in a tough spot since, at its current cash burn rate, it may be forced to raise additional capital by mid-2024. With that said, HYZN still shows some positive signs with its collaboration with Chevron and Raven SR. Furthermore, HYZN’s status as a hydrogen fuel cell EV maker increases its future growth prospects since lithium-based batteries, which most EV companies use, have a devastating effect on the environment. If HYZN can solve its liquidity problems, it can be a good stock to keep an eye on, but until then, it might be better to watch from afar.
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