What happened
After the White House approved all of the states' electric vehicle (EV) charging plans this week, some EV-charging infrastructure stocks powered higher. Volta (VLTA), on the other hand, is not faring quite so well. On Thursday, Volta updated its business outlook for 2022, and shareholders didn't like what they heard.
As of the end of Thursday's trading session, shares of Volta had plunged by 31.1% from where they were at the market's close last Friday, according to data from S&P Global Market Intelligence.
So what
Announcing a number of steps to better position the company for the future, Volta announced that it was engaging in "an organizational realignment to reduce costs and drive strategic priorities." One of the primary ways in which management will lower expenses is by reducing its workforce. According to Thursday's announcement, the company plans to cut its full-time staff by 10%. It's worth noting that Volta has already been downsizing this year: Since June 1, it has reduced its full-time workforce by 18%.
Giving further credibility to the Volta bears, management revised its third-quarter revenue forecast downward. Whereas it had initially projected sales in the range of $17 million to $18 million, it now expects to book $13.5 million to $14.5 million on the top line. The company also withdrew its sales guidance for the full year; previously, it had been projecting 2022 revenues in the $70 million to $80 million range.
Now what
It's little shock that investors are bidding Volta's stock downward this week, considering the drastic steps management is taking to rein in costs. While the company may have previously drawn some interest from growth investors, it now seems that the road ahead of the company will feature some serious speed bumps. Consequently, investors looking to add EV stocks to their portfolios may be better served to seek out companies that are on a more secure financial footing than Volta.
