Shares of Polestar (PSNY) are down 12% after the electric vehicle maker delayed the timeline for it to achieve profitability.
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The Swedish automaker said that its car sales fell short of expectations in the third quarter of 2024 and that its path to profitability would be longer than anticipated. The company also said that significant changes are required to improve operational, commercial, and financial performance.
News of the delayed profitability comes as Polestar reported a net loss of $323 million for Q3 2024. Polestar’s cash balance at the end of the quarter stood at $501 million, and it managed to secure over $800 million in bank financing this past December.
New Strategy
Along with its latest financial results, Polestar outlined a new business strategy, aiming for a sales growth of 30% to 35% from this year through 2027. Despite the company’s new goals, Polestar reported that its electric vehicle sales declined 8% in Q3 2024 from a year earlier. Management blamed the situation on competitive market conditions.
Polestar’s executive team added that the company is struggling with weak demand and fewer sales of its newer electric vehicle models such as the Polestar 3 and 4, and ongoing discounts and incentives used to try and boost interest in its cars.
PSNY stock has fallen 40% over the last 12 months and the company’s shares currently trade at $1.09, making them a penny stock.
Is PSNY stock a Buy?
Polestar’s stock has a consensus Moderate Sell rating based on two Wall Street analysts. Those ratings consist of one Hold and one Sell recommendations issued in the last three months. The average PSNY price target of $0.79 implies 27% downside risk from current levels.
