Shares in electric vehicle truck startup Lordstown Motors Corp. (RIDE) slumped 10.55% in extended-hours trade Monday after the company slashed its full-year production guidance and told investors it needed to raise additional capital.
The company said it now plans to produce half the Endurance electric pickups this year than it had previously anticipated. “Expected Endurance production in 2021 will be limited and would at best be 50% of our prior expectations,” read a company statement accompanying the EV maker’s first quarter (Q1) results, per MarketWatch. During the company’s Q4 earnings call, management flagged a production capacity of 60,000 trucks. Lordstown also told investors it required additional cash to continue funding its business plans and is in the process of securing an Advanced Technology Vehicle Manufacturing loan.
On the earnings front, the company said it made a loss of 72 cents per share in the quarter, much wider than the 28 cents a share figure Wall Street had expected. The bottom line loss also ballooned out from the 16 cents a share loss reported in the year-ago quarter.
Through Monday’s close, Lordstown Motors stock has a market value of $1.6 billion and trades 51.79% lower since the start of the year. However, the shares have gained around 15% over the past week.
Wall Street View
Earlier this month, Wolfe Research analyst Rod Lache downgraded Lordstown shares to ‘Underperform’ and lowered his price target to $1. Lache thinks the company will have difficulty competing in the commercial electric vehicle pickup space, specifically matching Ford’s price levels for its recently revealed F-150 Lightning electric pickup truck.
Elsewhere, the stock receives 1 ‘Buy’ ratings, 2 ‘Hold’ ratings, and 2 ‘Sell’ ratings. Twelve-month price targets range between $1 and $40, with the median pegged at $12 – 39% above Monday’s extended-hours closing quote of $8.65.
Technical Outlook and Trading Tactics
Despite analysts’ downbeat outlook for Lordstown shares, price action tells another story. The price recently broke above a multi-month downtrend line on above-average volume, indicating bullish conviction behind the move. Moreover, the MACD indicator crossed back above its trigger line last week to generate a buy signal.
Therefore, active traders should view news-driven selling pressure as a buying opportunity, providing the stock holds above this month’s low at $6.69. Look to book profits on a retest of key overhead resistance near the green horizontal trendline at $17.
For a look at today’s earnings schedule, check out our earnings calendar.