It was once a hype stock. Any news of the latest development spur buyers to bid up the stock prices. However, in recent months, investors have been lukewarm towards the company. The electric vehicle battery technology company has an average price target of $40, which is much higher than its current stock price. While this would suggest much good news ahead, investors have a wait and see attitude.
Huge Potential that Demands Patience
There are a couple of good things that can go right for the company. For one, QS is resting on breakthrough technology. It is venturing into the unknown with solid-state lithium anode chargeable batteries. Given the solid-state nature, there is no liquid acting as a medium to carry electric charges. The lithium anodes replace the graphite anode that is common in many EV battery technologies.
This version of the technology has great promise. It strives to lower the cost of electric vehicle batteries and promote better safety. It can lead to a higher range and a quicker charging process. A solid-state battery is likened to the holy grail of an EV car development, as there aren’t any such automotive-grade solid-state batteries.
Unloved or Pre-love?
The company is in the developmental stage, and investors are mindful that there will not be significant sales for several years. While the price target is attractive, the stocks have unattractive ratings, with only about two ratings as a buy. And this could point to the unpalatable risk-reward dynamic.
As we look ahead, the EV market is likely to see batteries with up to 10 layers, and QS is poised for such development as its batteries are like cards, stacking over each other. The company begins with a single layer, and with bigger battery cells, QS can finalize its cathode material. Then, by experimenting and choosing the suitable materials, they can reach a comprehensive battery cell design and shift to validating into production.
That’s what we could expect in the coming year and a half.
Valuing disruptive technology is an uphill task, and analysts’ QS ratings and price targets reflect that nature. Compared to its 52-week high, it is down by about 80%. On the flip side, it is roughly 150% up from its 52-week low.
On which side would you look? That’s the keen eye of an investor.
More Stories
🚀It’s time for a re-assessment; then came Nvidia’s boost.🚀
A flip-flop markets into earnings season
Nvidia pushes the market to roar back.