Workhorse Group Shares Rise Despite Missing Q2 Expectations

Workhorse Group, Inc. (WKHS), the manufacturer of electric-powered delivery and utility vehicles, missed second-quarter consensus expectations. Shares rose nearly 1.3% in Monday’s extended trading session after closing nearly 1.8% higher on the day.

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The company reported a quarterly loss of $0.35 per share, much wider than the consensus-estimated loss of $0.19 per share. In the prior-year quarter, WKHS recorded a loss of $1.76 per share. (See Workhorse Group stock charts on TipRanks)

Sales came in at $1.2 million, up 30.4% year-over-year, but fell short of analysts’ very optimistic estimates of $6.4 million. The increase in sales was attributed to a rise in the delivery of trucks to 14 units in the second quarter from only 1 in the year-ago period.

The company’s CEO Rick Dauch said, “Workhorse is making the transition from an advanced technology start-up to a leading manufacturer of pure electric-powered last-mile delivery solutions, which is no small task.”

Dauch added, “Workhorse and the EV industry at large are at an inflection point; we have a tremendous opportunity ahead of us, and we intend to move decisively to capture a meaningful share of this nascent market.”

Notably, the company mentioned that post the second quarter, it sold 72% of its Lordstown Motors (RIDE) shares, from which it expects to earn net proceeds of around $79 million.

In response to the company’s disappointing quarterly performance, BTIG analyst Gregory Lewis lowered his price target on the stock to $18 (75.1% upside potential) from $20 while maintaining a Buy rating.

Lewis noted that WKHS reported lower-than-expected sales and an implied lower number of trucks sold in the second quarter.

However, the analyst noted that the company has boosted vehicle production, with 133 trucks produced year-to-date, of which about 105 trucks are currently in inventory.

Additionally, Lewis noted that Rick Dauch taking over as the company’s CEO acts as a major catalyst to position WKHS as a leader in the Class 3 – 4 truck market, although it has been only two weeks.

Overall, the stock has a Moderate Buy consensus rating based on 2 Buys versus 2 Holds. The average Workhorse Group price target of $14.17 implies 37.8% upside potential to current levels. Shares have lost 32.7% over the past year.