What happened
After racing more than 11% higher from the start of September through the end of last week, shares of Gogoro (GGR -1.33%) appear to have run out of charge. On Tuesday, a JPMorgan analyst initiated coverage of the provider of battery-swapping solutions with a bearish view, and investors are taking note.
As of 11:33 a.m. ET Friday, shares of Gogoro were down by 14.4% from where they ended last Friday's trading session, according to data from S&P Global Market Intelligence.
So what
In his initial note on Gogoro, JPMorgan's Bill Lin assigned it an underweight rating and put a price target of $4.30 on the stock. Based on Monday's closing price of $5.26, that price target implies a downside of 18.3%.
Why is Lin so dour on Gogoro's prospects? According to TheFly.com, Lin based his stance on declining sales of electric scooters in Taiwan, the company's primary market. In addition, Lin described Gogoro's progress in foreign markets as "disappointing," and added that macroeconomic uncertainty in China was another important reason for caution regarding the stock.
Lin's bearish commentary wasn't the first hint that investors have gotten that this company's future may be challenging. During a recent investor presentation, Gogoro management revised its 2022 revenue forecast downward. Whereas in May, the company projected sales in the range of $460 million to $500 million for the year, it now expects to generate revenue of $380 million to $410 million.
Now what
While it is common for a stock to fall after an analyst issues a bearish take on it, it's important to remember that these Wall Street prognosticators often base their outlooks on shorter investing horizons than the multiyear holding periods that the Motley Fool favors. Therefore, investors considering this growth stock should dig deeper into the company's progress in expanding into global markets and take a closer look at its financials. Those areas warrant more emphasis than one analyst's short-term-focused opinion.
