Shares of QuantumScape (QS) have lost almost 36% over the past six months, but gained 26% over the past month.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
QuantumScape went public late last year through a SPAC transaction that was completed on November 27. The firm is developing a unique next-generation solid-state battery technology for the electric vehicle (EV) market.
This next-generation technology provides better energy density, faster charging, and longer battery life. As a result, QuantumScape’s lithium-metal batteries should be able to capture a bigger portion of the EV market.
However, concerns over QuantumScape’s ability to provide these prototype samples to car original equipment manufacturers (OEMs) on a commercial basis could keep the shares range-bound. Notably, the firm generated no revenue in the second quarter, and its loss per share increased to $0.12 per share from $0.06 in the year-ago quarter.
Thus, I am Neutral on QuantumScape stock. (See QS Dividend Date and History on TipRanks)
Partnerships – A Key Catalyst
According to reports, QuantumScape has partnered with a major carmaker to test prototypes of its solid-state battery cells this month. This is QuantumScape’s second collaboration with a carmaker in order to prepare itself for the production of next-generation battery cells for electric vehicles.
As per the terms of the deal, the OEM will also acquire 10 Megawatt Hours (Mwh) of battery capacity from the company’s pre-pilot production line facility.
Additionally, the collaboration between QuantumScape and Volkswagen AG (VWAGY), which was announced in 2018, remains an important catalyst for the company. Since 2018, the two businesses have strengthened their partnership in order to manufacture mass-scale solid-state batteries.
The success of these collaborations should act as a stimulus for the company’s stock price to rise even higher.
What are the Analysts Saying?
J.P. Morgan analyst Jose Asumendi initiated coverage of the stock with a Hold rating and a price target of $35. This implies 29.6% downside potential to current levels.
Though the analyst expects QuantumScape to originate a new type of rechargeable battery technology, he chooses to stay on the sidelines for the time being, because the business has yet to produce any commercial goods.
Overall, the stock has a Moderate Buy consensus rating, based on 1 Buy and 2 Holds.
As for price targets, the average QuantumScape price target of $34.00 implies 25.9% upside potential to current levels.
Disclosure: On the date of publication, Shalu Saraf had no position in any of the companies discussed in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
