Workhorse Group (WKHS) Stock Forecast: Is it a Buy after a 58% Crash?

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The share price of electric vehicle (EV) maker Workhorse Group Inc. (NASDAQ: WKHS) over the past six months resembles one of the more scream-inducing theme park roller coaster rides, as abrupt upsurges quickly turn to plunges.

The company’s shares climbed over $42 in early February on news of the administration’s late January vows to switch the Federal government’s vehicle fleet to a fully electric lineup. However, when a contract for up to 165,000 USPS vehicles under the Next Generation Delivery Vehicle program went to Oshkosh Corporation (NYSE: OSK) instead, Workhorse saw its share value collapse to less than half that peak in under three weeks.

Today, Workhorse is seeing its shares climb again more than 6% at times. What’s the scoop on this EV company and where is going in the future? Let’s take a look.

Workhorse Group Stock Forecast: What Wall Street Is Saying


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Data from CapitalIQ shows Wall Street with an average price target of $19.40 on Workhorse Group. Price targets range widely from $11 all the way up to $29.

Consensus estimates had Workhorse making $1.9 billion in 2025, but those estimates will probably come down in the months ahead as analysts revise their projections downward. With Wall Street price targets near where Workhose stock is trading today, could they be missing the potential for a rebound?

Signs Workhorse Stock Could Still Be a Buy

The big contract with the USPS for a new fleet of delivery vehicles which recently slipped through Workhorse’s fingers is currently dominating most investor news, and perspectives, about the company.

There is still a slight chance political maneuvering could deliver the contract, or part of it, to Workhorse. Rep. Carolyn Maloney, House Oversight and Reform Committee chairwoman, is calling for the release of the USPS contract, stating “a thorough review is warranted to ensure the award process is free from undue influence and potential interference,” according to Reuters. While the chance of a reversal is slim, it potentially still exists.

A stronger bull case for Workhorse, however, rests on the company not depending solely on the USPS order to grow. The company has announced another order this year. Though considerably smaller than the 165,000 units wanted by the Postal Service, the company received an order for 6,320 delivery vehicles from privately-held North American logistics and transport company Pride Group Enterprises or PGE on Feb. 4. Workhorse says the first batch of the fully electric delivery vans will likely reach PGE in July 2021 with the entire order completed by 2026.

Given that Workhorse has only delivered a total of 370 vehicles to date during its 14-year history, the order will provide the company with funds if it is successfully delivered. It will also prove Workhorse’s ability to successfully build vehicles by the thousand, a data point potentially attracting new orders along with investor interest. As CEO Duane Hughes remarks, the order “solidifies our first-mover advantage and indicates the heightened interest in our last-mile delivery products.”

While the company’s value won’t soar on this production, it could signal a breakthrough into larger-scale operations ramping up revenue and earnings moving forward. Additionally, Workhorse owns a stake in EV company Lordstown Motors (NASDAQ: RIDE), a company scheduled to showcase its distinctive all-electric pickup truck in an April Baja California overland race, and allegedly beginning significant production in September.

If Lordstown Motors meets its projections, the close ties between the companies could result in a stock market rise for Workhorse as well, particularly if the two cooperate on future EV projects and orders.

The Bear Case: Why Workhorse Could be a Sell

Conversely, if Workhorse’s future depends heavily on the USPS contract, a bearish scenario could prevail instead. The contract calls for between 50,000 and 165,000 delivery EVs to be delivered in the next 10 years, with $482 million awarded up front to the winning bidder for design, factory development, and the like. However, with only 370 vehicles produced in its entire history, it remains questionable if Workhorse could meet the production deadline.

Oshkosh looks more likely to keep the contract despite the current political kerfuffle, simply because it can probably deliver. The company is already producing fire engines, armored military trucks, and various other utility type vehicles on a large scale, using a workforce of 14,000.

Additionally, the company has 104 years of experience compared to Workhorse’s 14. BTIG analyst Gregory Lewis summarized the situation by stating “Oshkosh is a real company. They can deliver vehicles,” as reported by Bloomberg.

Political resistance to Oshkosh as the winning bidder could also potentially be defanged not only by practical production considerations, by the fact that while only 10% of the fleet built by Oshkosh will be electric, the company claims it can retrofit its deliveries of the Next Generation Delivery Vehicle with electric engines sequentially, thus still likely meeting the Biden administration’s USPS electrification goals.

Bottom Line: WKHS Stock Looks Promising

Investors considering investment in Workhouse Group stock are faced with a simple dilemma. If Workhorse’s success depends wholly or significantly on the USPS Next Generation Delivery Vehicle, its future looks bearish, since Oshkosh is the favored company for retaining the Postal Service contract. However, if Workhorse can start generating revenue from other sources, it could well be one of the winners in the EV boom, even if it remains in the smaller, more specialized commercial vehicle sector.

While the stock is volatile and some of its potential remains opaque until Workhorse actually proves itself capable of manufacturing thousands of vehicles in a timely manner, the bull case seems somewhat stronger. The 6,320 van order for PGE is a more realistic first delivery for Workhorse than 165,000 EVs to the USPS, and will provide the company both with invaluable experience in larger-scale production and prove its viability both to customers and investors.

The fact Workhorse has risen today over 6% on news of Volkswagen (OTC: VLKAF) announcing its plans to cut battery construction costs by 50% as part of its Battery Day presentation, proves Workhorse Group can generate positive stock market attention outside the narrow limits of the USPS order as another player in a rapidly growing field, and is worth a look by investors interested in the EV stocks.

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