12/17/2022 0 Comments Workhorse news usps contract![]() ![]() "In the interim, we have retained the services of leading legal and corporate advisory firms, including Akin Gump Straus Hauer & Feld LLP and Mound Cotton Wollan & Greengrass LLP, to identify our options and pursue them effectively," he said. "While we were not modeling success in the USPS, we had anticipated Workhorse would play a role in the contract, especially given the administration's stance around government fleets being zero emission," Cowen analyst Jeffrey Osborne wrote on Monday after Workhorse's Q4 earnings call.Īfter a meeting with the Postal Service on Wednesday, Workhorse said it will "follow the proper due course procedures as defined by the USPS and will also look to other options available to us," Workhorse CEO Duane Hughes said in a press release Thursday. Roth Capital analyst Craig Irwin downgraded electric truck maker Workhorse Group ( WKHS) - Get Workhorse Group Inc. Analysts, in turn, cut their target prices. When that didn't happen, Workhorse shares lost 50% of their value in two days. They expected it would get at least a piece of the multibillion-dollar contract. With the large USPS contract seen as just a bonus, investors will do well in this stock with a market cap at only $3 billion and an annual market opportunity topping $18 billion.Investors had bid up Workhorse shares to record levels. As long as the company continues to make progress in attracting orders outside of the USPS contract and expanding capacity, the stock will remain a strong growth story. The key investor takeaway is that Workhorse will remain a highly volatile stock in the EV space. In addition, supply chain issues with a battery supplier isn’t helping the recent slow production ramp. The company currently has a cash balance of only $260 million, so Workhorse is going to need to grow manufacturing capacity and possibly work with Lordstown Motors to build out capacity. ![]() Postal Service (USPS) decision in February to award a multibillion-dollar, 10-year contract to. ![]() More contracts and even winning a portion of the USPS deal will set up Workhorse for a bright future in the EV delivery truck sector without needing to hit these initial financial targets. Electric vehicle company Workhorse Group (WKHS.O) filed a legal challenge on Wednesday to the U.S. Investors should expect the EV delivery truck company to fail to reach these analyst revenue estimates, while the stock could still rally.Īs investors have seen with Tesla over the years, the stock will trade based on the company making progress towards the growth story. To reach these estimates, Workhorse would either have to hit a higher ASP (average selling price) or to actually deliver up to 2,800 vehicles. The company doesn’t even expect to deliver 450 vehicles per quarter in 2021 after failing to reach an original meager goal of 300 to 400 vehicles in 2020.Īnalysts have aggressive 2021 targets with revenue estimates of $139 million. Combined with the recent rollout of the Ryder contract, Workhorse is far less reliant on the USPS contract.ĭespite the work with the USPS for years now, Workhorse is still very unproven as far as an EV manufacturer. The order follows an initial 500 C-1000 delivery vehicle order from Pritchard Companies, which has developed a distribution network of commercial vehicles with sales topping 30,000 units annually. The deal starts in July and runs through 2026 and would have a value of over $300 million based on a truck ASP of $50,000. ![]() While the government continues to delay the awarding of the estimated $6.3 billion contract, Workhorse signed a deal with Pride Group Enterprises for 6,320 C-Series all-electric delivery vehicles. ![]()
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