QuantumScape (QS 5.69%) stock is falling in Thursday's trading. The company's share price was down 6.2% as of 1:45 p.m. ET, according to data from S&P Global Market Intelligence. For reference, the Nasdaq Composite index is down 1.6% in the daily session as of this writing.
QuantumScape published its third-quarter results after the market closed yesterday and actually delivered a loss that was smaller than the market anticipated. But investors are becoming more cautious about growth-dependent stocks today, and the battery specialist is participating in the broader valuation pullback trend.
A smaller-than-anticipated loss can't lift QuantumScape stock
QuantumScape's business is still in a pre-revenue state, but its loss in the third quarter was smaller than Wall Street had anticipated. The company posted a loss per share of $0.23 in the quarter, while the average analyst estimate had called for a per-share loss of $0.39.
Despite the better-than-expected bottom-line performance, it's unsurprising to see the stock pulling back today in light of trends impacting the broader market. Investors are becoming increasingly bearish on economic trends, driving substantial sell-offs for companies with growth-dependent valuations.
Is now the time to buy QuantumScape stock?
While QuantumScape's solid-state lithium-metal battery technology is promising, the company's outlook is highly speculative. The business continues to post substantial losses, and it's unclear when the battery specialist will eventually see strong demand for its products and be able to manage a manufacturing ramp-up and shift into profitability.
QuantumScape has posted a loss of roughly $331.7 million across the first nine months of 2023. The company ended last quarter with roughly $1.1 billion in liquidity, but it's also been leaning heavily on selling new stock to raise funds. At its current rate of cash burn, the battery specialist should be able to continue funding its operations into 2026, but its sales trajectory remains highly uncertain.
QuantumScape stock could post explosive growth if its battery tech sees significant adoption, but there's a high degree of speculation involved in charting the company's forward performance. For investors without very high levels of risk tolerance, the stock probably isn't a great portfolio fit, even though it's looking cheaper in today's trading.
