Shares of Workhorse (WKHS) took a hit in February and March, which made the stock to fall 182%. How about in April? The answer is that it is likely to continue to fluctuate.
The company hopes to win a massive order to replace more than 150,000 Post Office delivery trucks over the next decade, which help Post Office to realize a modern fleet, but the Post Office got other ideas. In February, the Post Office awarded a contract to build new delivery trucks to rival Oshkosh, the company's stock lost a significant portion of its value after the contract was announced. And in March, the company's shares continued to trade in a volatile manner.
However, the story is not over yet. According to a B. Riley Financial analyst Christopher Souther that it is unclear whether calls for funding from USPS to accelerate electrification plans or from Democrats to halt the contract and investigate the process will lead to Workhorse being awarded a piece of the program or speed up the plans for retrofitted vehicles.
Workhorse's shares rose by 13.56% yesterday after Souther's report released. It is reported that the contract is expected to be worth $6 billion in total for ten years. Souther also gave a buy rating on the stock and assigned a price target of $20.00, which is 51% upside potential.
In fact, the company now has a backlog of more than 8,000 vehicles, which could bring about $600 million in revenue in the future. Even it lost Post Office order. Workhorse still has the opportunity to raise its sales, but this may take a long process.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.