Will Fisker Stock Be The Best Electric Vehicle Stock To Buy Now?
Fisker Inc. (FSR Stock Report) made its public debut on the New York Stock Exchange last Friday. The stock jumped as much as 19% before closing 13% on its first day of trading. As you may or may not know, the company began trading after finalizing a reverse merger with Spartan Energy Acquisition Group (SPAQ Stock Report). The company is among a growing group of speculative electric vehicle start-ups going public through special purpose acquisition companies (SPACs), led by Nikola (NKLA Stock Report).
Through a special-purpose acquisition sponsored through Apollo Global Management, the electric-vehicle hopeful was able to expedite its transformation. Of that $2.9 billion deal with Apollo, Fisker today noted that it has $1.0 billion of cash available on its balance sheet, with no debt. “This amount is expected to fully fund Fisker operations and the development of the Fisker Ocean program through the planned start of production in Q4 2022,” the company said. If you are interested in this new exciting electric vehicle stock in the stock market today, read on.
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What Is Fisker Inc.?
For the die-hard automotive fans out there, the name Henrik Fisker certainly rings some bells. An automotive icon and tech visionary, Henrik has created some of the most iconic vehicles ever on four wheels. These include James Bond’s famed BMW Z8 and his latest disruption, the revolutionary Fisker Ocean. Given his track record of producing many of the luxury automobile world’s most iconic vehicles, when Henrik designs a car, the world pays attention.
Today, he leads Fisker in reimagining the way we move with the world’s most emotionally charged and highly sustainable vehicles. Although his previous startup did not end with a bang, Fisker Inc. is among the more compelling of a raft of electric-vehicle startups going public or seeking major funding this year.
Shares of Tesla (TSLA Stock Report) and Nio (NIO Stock Report) have risen close to 350% and 800% respectively since the start of this year. Such massive run-ups have attracted a seemingly endless flood of public and private investment to EV and EV-adjacent startups.
Fisker Went Public Through The SPAC Route; Is It Legit?
With electric vehicle stocks being so hot in the stock market this year, many start-ups are capitalizing on the fresh floods of money to the space. They utilize a faster and more efficient way of raising funds, which is the SPAC. While it may be deemed as the go-to choice, the SPACs have so far had some negative connotations for EV stock enthusiasts.
It is arguably less transparent and rigorous, which appears to have contributed to at least one major flameout. You may recall that Nikola stock dropped as much as 77%. Another electric vehicle stock currently under scrutiny is Workhorse Group (WKHS Stock Report), also an EV SPAC company. The stock had plummeted in recent weeks. Nikola’s case was obvious. But there could still be a chance for a rebound for WKHS stock. That’s if the company could win the multi-billion dollar contract with the U.S. Postal Service (USPS). Just to be clear, having two EVs failing to meet their “promises” doesn’t mean Fisker will share the same fate, right?
Can Fisker’s Ocean Rival Tesla & Nio?
Fisker expects to launch its Ocean model in the fourth quarter of 2022. It appears to me that it is a legitimate rival to Tesla’s Model X and Y or Nio’s ES6 in terms of performance, design, and features. Yet the Ocean will be selling for just $37,500. That’s less than half of what consumers are paying for the Model X at $80,000. If Fisker can indeed sell the Ocean at this price, you would expect it to be an instant winner. Now, the car may only launch in 2022. As such, would you be willing to stake on FSR stock for this potential game-changer?
Fisker And Tesla
No doubt, being the poster child of the EV industry, Tesla’s success story is worth the comparison. The company reported another blowout quarterly results recently, which were in-line with analysts’ expectations. However, along with the broader market sell-off in recent days, TSLA stock took a hit along with other blue-chip stocks. However, investors have to note that Tesla is no longer a one-trick pony. The company also has a stake in the energy business which gave it a leg up compared to Fisker.
Tesla’s sky-high valuation might drive investors looking for the next Tesla. And Fisker could be a more affordable option for potential growth. But the saying “you get what you pay for” couldn’t be more true in this situation. Operationally, Tesla seems to be on solid footing while Fisker is just about to get started. Fundamentally, Tesla’s impressive growth streak seems likely to continue while Fisker may need a bit more time to prove itself. Nevertheless, Fisker’s growth outlook appears bright if it is able to deliver its first car successfully. That said, would you take a bet on Fisker stock today hoping it would reach Tesla’s level in the long run? You be the judge.
Fisker And Nio
The outperformance of NIO stock was notable considering many electric vehicle manufacturers continue to trade lower. This came as investors appeared to be unloading high volatility stocks on economic concerns related to the resurgence of coronavirus cases. The company recently hit a key production milestone. This is the first time the company has manufactured more than 5,000 vehicles in one month. An upgrade to its production line during the third quarter made it feasible.
All eyes will turn to NIO again when the company reports its third-quarter results, likely in mid-November. Given the strong sales, many are hoping that profitability will improve as well. Additionally, investors will be keen to know the company’s future plans. These include details of its upcoming sedan model likely to be introduced early next year. Considering the run-up in the stock price this year, on top of Fisker, would you bet on Nio to continue its momentum?