EVs are a mess but I’d consider Fisker (FSR) stock for 2024

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on Dec 29, 2023
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  • Fisker share price crashed by over 82% from its 2024 highs.
  • The company missed and downgraded its deliveries target for the year.
  • Fisker, which is seen by some as a scam, will likely work on its logistics in 2024.

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Fisker (NYSE: FSR) stock price was brutally punished in 2024 as investors dumped EV shares. The stock plunged to a record low of $1.38, which was over 82% below its highest point during the year. This plunge has seen its market cap retreat from over $12.45 billion to less than $600 million. 

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The bullish case for Fisker

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Fisker has been in a strong downtrend even after the company made important milestones during the year. It started deliveries in June and has now manufactured over 10k cars this year. In a statement on Friday, the company said that it had succeeded in delivering over 7,300 vehicles in 2023.

Fisker shares were punished because it lowered its deliveries targets two times during the year. The company lowered the delivery target because of the logistics challenge of shipping its vehicles from Europe to the United States.

Unlike other EV companies, Fisker does not manufacture vehicles itself. Instead, it uses an approach that has been used successfully by companies like Apple and Google. It uses Magna, a company that has a long manufacturing record to do the hard work.

Fisker’s delivery downgrades are expected since this is a relatively new company that is using a new manufacturing approach. Still, the company has done well, as it has sold vehicles in over 16 countries globally. 

Most importantly, unlike other EV companies like Mullen Automotive and Faraday Future, Fisker has adequate funds in its balance sheet. It ended last quarter with $625 million in cash and restricted cash. It also has about $50 million in VAT receivables. 

This means that the company has adequate funds to last through 2024. Still, I anticipate that the company will raise additional funds to boost its balance sheet, possibly in the third or fourth quarter.

To be clear. Fisker, like other EV companies, faces an uphill battle now that demand is cooling. We have seen many companies, including giants like Ford and General Motors downgrade their vehicle sales due to weak sales. 

Fisker will also face the challenge of a slowing US and global economy and the charging infrastructure in the US. However, the company seems undervalued to me. Besides, its vehicles have attracted strong customer reviews, especially the solar roof. They are also quite affordable, with Fisker Ocean Sport selling for as low as $39,000.

Fisker stock price forecast

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Fisker stock

FSR chart by TradingView

The FSR share price has been in a freefall this year as concerns about its deliveries rose. It settled at $1.38, which was much lower than the year-to-date high of $8.66. As a result, it has remained below all moving averages while the Smart Money Index (SMI) has continued falling. The Average True Range (ATR) has also continued falling.

Therefore, I suspect that the stock will bounce back in 2024 as the company works on its logistics issues. If this happens, the shares could rise to about $3, which is almost 100% above the current level. Still, this is a risky company, meaning that it could also continue its freefall in 2024, as I warned in this article.

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