Fisker stock price forecast: don’t buy this FSR dip yet

on Nov 14, 2023
  • Fisker share price has crashed to the lowest level on record.
  • The company published weak financial results and lowered guidance.
  • It also delayed its SEC 10-Q report citing material weakness.

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Fisker (NYSE: FSR) stock price plunged to the lowest level on record after the company published weak financial results. The shares collapsed to a record low of $3.56, which was about 58% below the highest point this year. This decline has brought its total market cap to about $1.1 billion.

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The EV meltdown continues

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The electric vehicle (EV) industry is going through a major challenge as most companies continue burning cash. I wrote about Lucid Group, which has incinerated billions of dollars in the past few years. 

Other EV companies are also struggling. Ford and General Motors have slashed their outlook for EV production targets, citing weak demand in the industry. Tesla, the biggest EV company in the world, has been forced to slash its prices in a bid to boost market share.

Fisker is the latest company to warn about its operations. In a statement, the company said that its revenue jumped to over $71.8 million in Q3 as it started delivering its Fisker Ocean vehicle. It delivered 1,097 vehicles while the cost of goods sold soared to $83.9 million.

The company lost $91 million in the quarter as the cost of operations continued rising. These losses were expected since the firm is in the early stages of monetising its products. Other EV companies like Tesla and Byd made huge losses shortly after they started production.

Fisker stock price crashed because its performance was weaker than expected. Also, the company lowered its guidance. It expects to deliver between 13k and 17k units this year, lower than what it had guided in the previous quarter.

The company cited the outbound logistics and service network as the reason for the outlook downgrade. For one, the company is seeing longer delivery times from its manufacturing zone in Belgium to the United States.

Fisker share price also collapsed after the company said that it would delay its 10-Q filing after it found material weaknesses in internal controls. Historically, these delays tend to be red flags.

Still, I believe that Fisker has a brighter future than other EV companies like Mullen Automotive and Faraday Future. It has a strong balance sheet with over $650 million in cash and short-term investments. 

Also, unlike other firms, Fisker operates an asset-light model where it relies on Magna for its manufacturing. This explains why the firm has ramped up its production in just a few months.

Fisker stock price forecast

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fisker stock

Fisker chart by TradingView

Fisker’s share price crash has been quite profitable for many investors since it has a short interest of about 50%. The stock has now crashed below the ascending trendline that connects the lowest point since April 20th. 

It also dropped below the psychological level of $4 and remains below the 50-day and 100-day Exponential Moving Averages (EMA). If this happens, the shares will likely drop to the next key support at $3.

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