Electric vehicle companies are hot this year, but the industry has had a difficult start to 2022 due to some external reasons. Fisker (NYSE:FSR) stocks are under the scrutiny of many investors and the company is making strong strides in the emerging industry.
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Fisker reported fourth -quarter results in line with analysts ’expectations, reaffirming its strength and confirming that the company is on track with the production schedule. That was a nice turnaround from Q3, without me impressing investors, and it was when I wrote about stock avoidance. FSR stock was trading at $ 19 back then. As expected, the stock started to decline soon after and became as low as $ 10.
It is trading near $ 12 today, lower than the all -time high of $ 31. But if you’re bullish on the EV sector, it’s not painful to buy and hold FSR stock until deliveries start. This is when the stock will see a massive surge.
The Future Looks Bright
The company announced Fisker Ocean in November last year and its reservations reached 30,000 on Feb. 14. It also has 1,600 fleet reservations for the Ocean, which includes an order of 200 units from Service Today (NYSE:NOW).
Fisker is also opening reservations for a second product, the Personal Electric Automotive Revolution (PEAR), with a starting price of $ 29,900 in the US for the five -passenger model. This will give customers a wider choice and give the company the opportunity for a large commercial order. Considering the number of reservations for Ocean Fisker, it can be assumed that buyers are willing to chase luxury and willing to pay a higher price for the same.
Fisker ended the year with a cash balance of $ 1.2 billion, which was enough to fund Fisker Ocean’s production launch later this year. Non -GAAP operating costs totaled $ 458 million, in line with guidance provided by the company in the third quarter. Loss from operations amounted to $ 133.4 million and net loss amounted to $ 138.4 million.
For 2022, the company expects total costs to be in the range of $ 715 million to $ 790 million.
It has also started producing next -level prototypes in the assembly factory and will soon produce two prototypes in one day. Fisker is scheduled to be on the production schedule for Fisker Ocean and will begin delivering in November.
There are 30,000 reservations and the average sale price of both is $ 56,000, which means total revenue for the company could be close to $ 1.7 billion. This is possible next year. This does not include commercial orders and the potential to grow in that segment.
The Bottom Line In FSR Stock
Fisker has a solid monetary balance, but it is a pre-revenue company. Which makes it difficult to judge the future. However, since the company is on track with the production schedule, it looks like management has everything fixed and organized. Although we assume that reservations will not exceed 30,000, the company has a tremendous capacity to generate revenue.
I don’t think FSR stock will rise and hit new highs anytime soon, but it will definitely grow in the long run. If you are keen on the EV industry, this is a stock to buy and hold over the next two years. Tesla (NASDAQ:TSLA) began its journey small and see where it is now!
The FSR stock is lower than its all time high and this is an opportunity to take your position. Anything below $ 15 is a good bet.
As of the date of publication, Vandita Jadeja does not (whether directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the authors, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. He believes in buying and handling for long term income. Her knowledge of words and numbers helps her write clear stock analysis.