2024-04-07 02:20:17 Eastern Standard Time
All eyes will be on Lotus Technology (NASDAQ: LOT) stock this week as it releases its first financial results as a publicly traded company. Management will be hoping those gains will boost the stock, which has fallen more than 58% from its February high, wiping out about $2 billion in value.
Lotus Technology Revenue
The electric vehicle industry faces significant headwinds due to saturation and compressed profit margins. All EV companies, including the mighty Tesla, have fallen significantly this year.
Lotus Technology is an EV company part-owned by Lotus Group, Britain's leading luxury car manufacturer. Lotus Group is majority owned by Chinese company Geely Automobile, which also owns Volvo and Polestar.
Lotus Technology completed a SPAC merger in February that briefly valued the company at more than $7 billion. The listing was part of Geely Auto's strategy to take most of its companies public.
I don't think this result is good. According to the latest results, his revenue for the first six months of this year in LOT was $130 million. China accounted for $93 million of sales, followed by Japan and the UK.
The company is still wasting huge amounts of money. Its net loss for the first half of this year exceeded $353 million. This deficit would likely continue as the company continued to invest large sums of money. Lotus Technology lost more than $724 million in 2022 due to investments in production.
Lotus Technology is subject to additional risks that may harm investors. First, as a Chinese company, there is a risk that tensions with the United States will continue. The company could also face delisting if the SEC fails to verify the audit within two years.
The biggest risk is whether luxury car buyers are willing to buy EVs instead of traditional luxury cars such as Ferraris, McLarens, and Porsches.
There is also the issue of funding. It is unclear whether Geely will continue to fund the company in the long term. The company recently announced it would slow down its investment in Polestar.
LOT stock price prediction
Lotus stock peaked at $16.46 shortly after going public in February, according to hourly charts. It has since fallen to its March low of $5.47. The stock was trading at $6.76 on Friday. It formed a small triangle pattern and moved into a 50 period weighted moving average.
It's too early to predict Lotus Technology's next share price move. However, it could be a bearish breakout as it shows more colors for losses. If that happens, the stock could fall to $5.47, 20% below current levels.
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