What happened
Shares of Hyzon Motors (HYZN -4.60%) gained 14.5% in March, according to data from S&P Global Market Intelligence. The hydrogen fuel cell truck company's share price got a boost from market momentum and the release of fourth-quarter earnings results.
Hyzon specializes in heavy trucks powered by hydrogen fuel cell technology, and the company's stock has benefited from increased interest in renewable energy and electric vehicle (EV) technology as gas prices have soared in recent months. The company's stock also appears to have gotten a significant boost from an uptick in bullish sentiment for the broader market last month.
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So what
With bearish catalysts including Russia's invasion of Ukraine, high levels of inflation, and concerns about the Federal Reserve's plans to raise interest rates this year, growth-dependent stocks were hit with dramatic sell-offs in February's trading. Some of these pressures were perceived to moderate somewhat across March's trading, and the growth-heavy Nasdaq Composite index closed out the month up roughly 3.4%.
Hyzon also published its fourth-quarter earnings results on March 23, and its stock got a significant boost following the release. The company closed out the fourth quarter with a deliverable sales backlog of $287 million, up 246% compared to the performance update that the company delivered in July. The EV-truck specialist ended the fiscal year with a cash balance of $445.1 million, providing the flexibility to continue funding expansion initiatives without necessarily needing to rely heavily on new stock offerings.
Now what
Hyzon Motors stock has given up some of last month's gains early in this month's trading. The company's share price is down roughly 3% in March so far as of this writing.
After some volatile pricing swings, Hyzon now has a market capitalization of roughly $1.53 billion and is valued at approximately 15.3 times this year's expected sales. It's likely that the company's valuation will continue to be impacted by investor appetite for risk and the growth outlook for the EV space in the near term.
Hyzon expects to deliver between 300 and 400 vehicles in 2022, with the majority of vehicle deliveries slated to occur in the back half of the year. For comparison, the company delivered 87 fuel cell EVs in 2021.
The company is seeing increasing adoption for its hydrogen fuel cell powered trucks, but investors should keep in mind that the business's long-term outlook remains somewhat uncertain. With shares down roughly 46% from the high they hit last September, the stock could bounce back to deliver big wins. However, the EV space is becoming increasingly competitive, and Hyzon looks like a high-risk, high-reward play at this point.
