Connect with us

Hi, what are you looking for?

Investing

QuantumScape stock price forecast: a high-risk investment

QuantumScape (NYSE: QS) stock price jumped by more than 12% on Monday as electric vehicle shares jumped. The stock rose to a high of $6.78, which was about 18% above the lowest level this month. Despite the rally, the shares have dropped by over 38% since the company went public and by over 94% from the highest point on record.

Is QS a good investment?

QuantumScape is a pre-revenue company that is developing solid-state batteries that it hopes will have a major role in mobility and consumer electronics. In the past few years, the company has made major investments and advances in the industry.

Most importantly, the company is now carrying out tests of its prototype as it works towards mass production. Early reports show that the company’s battery technology is working. The company’s goal for this year is to facilitate moving from technology demonstration to commercial product.

As a pre-revenue company, investors usually focus on how the company is using its existing resources. The most recent results showed that the company’s operating expenses jumped to $110 million while the net loss came in at $105 million. The company hopes that its operating expenses will be between $225 million and $275 million.

QuantumScape has over $1 billion in liquidity and it expects that these funds will give it a runway to extend beyond 2025. Like many companies in its stage, the company has diluted its investors several times. As a result, the number of outstanding shares rose from 409.51 million in December 2021 to over 435 million now.

It is still too early to recommend investing in QuantumScape despite its remarkable progress. I suspect that the company will continue making losses even when it starts mass production of its batteries. Analysts believe that it will become profitable in 2029. By then, QuantumScape will need to raise additional capital several times.

QuantumScape stock price forecast

QS chart by TradingView

The daily chart shows that the QS share price has been in a strong bearish trend in the past few months. It has moved below the important support level at $11.20, the lowest level on October 29 2020. It has crashed below the 50-day and 100-day exponential moving averages.

The stock has formed what looks like a double-bottom pattern at $5.10. This pattern is usually a bullish sign. Therefore, we could see the stock rebound to the resistance at $11.20 in the near term. In the long term, the shares will likely continue falling amid dilution risks.

The post QuantumScape stock price forecast: a high-risk investment appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    President Biden is asking Congress to approve nearly $100 billion in emergency funding to aid recovery efforts for the recent deadly storms that ravaged...

    Stock

    One hallmark of secular bull markets is rotation. When leading stocks, sectors, and industry groups falter, there needs to be others that grab the...

    Latest News

    Vice President Kamala Harris spent a whopping $1.5 billion during her 15-week campaign that ended in defeat to President-elect Donald Trump, including burning through...

    Latest News

    Activists on Saturday demanded that the state of California pay millions of dollars to each Black resident in reparations as a way to make...



    Disclaimer: Frequencytraders.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 Frequencytraders.com