What happened
Extending the slide that saw them fall 2.5% in May, shares of Fisker (FSRN -12.70%) continued to drive lower last month. According to data provided by S&P Global Market Intelligence, Fisker stock sank 10.2% in June. While the stock's slide is notable in and of itself to investors, it's even more concerning considering the bullish sentiment in the overall market -- enthusiasm that saw the S&P 500 climb about 6.5% in June.
Besides some negative coverage from Wall Street, investors chose to pump the brakes on Fisker's stock despite the company's report of a significant milestone.
So what
Projecting that it has a rocky road ahead, Shreyas Patil, an analyst at Wolfe Research, assigned a $6 price target to Fisker's stock, downgrading shares to underperform from peer perform. Based on where the stock closed on the day before Patil's commentary became public, the $6 price target implies a downside of 3%. Subsequently, shares closed down by 7.7% on news of the analyst's bearish outlook.
Later in the month, Fisker reported it had commenced deliveries of its Ocean SUV to customers in the United States. Naturally, this seemed like a positive development for the upstart electric vehicle (EV) maker. But investors weren't pleased. Instead of focusing on the achievement, they were left lamenting the company's lack of insight into full-year vehicle production. In February, Fisker had projected 2023 production of 42,400 vehicles. Three months later, however, Fisker reduced its 2023 production outlook to 32,000 to 36,000 units.
Investors would likely have been more celebratory if they had further reassurance from management that Fisker remained on track to achieve the updated production guidance. Instead, they appeared skeptical of the U.S. deliveries announcement, speculating that it was the company's attempt to distract from the possibility that actual 2023 vehicle production would be even lower than the already downwardly revised guidance.
Now what
Although the market wasn't all too charged up about Fisker's stock in June, shares are climbing higher to start the second half of the year. Fisker recently reported that it produced 1,022 vehicles in the second quarter of 2023, and at the end of June, it had achieved a daily assembly rate of 80 units.
According to management, the culprit for the company's reduced 2023 production outlook is supply-chain complications. Investors who are considering hitching a ride with Fisker should certainly monitor the company's production numbers in the coming months, but that's certainly not all. It's imperative that they also examine the company's financial results in the coming quarters to look for warning signs that the company's financial health is imperiled.
