A struggling electric vehicle (EV) penny stock may be about to get a lift. Workhorse Group (NASDAQ:WKHS) is still recovering from a tough year marked by high volatility. And while WKHS stock is trending downward today, the company announced a positive update: it has received its first commercial purchase order for its HorseFly unmanned aerial system (UAS).
More specifically, it has received two orders for two all-electric commercial drones. This technology has multiple commercial applications, but HorseFly drones are designed for last-mile delivery services. Many details regarding these orders are still unknown, including sales figures. However, this could signal the start of a new chapter for Workhorse.
What’s Happening With WKHS Stock
Despite some slight growth over the past month, WKHS stock has struggled significantly lately. Even in the face of good news, it is struggling to rally. As of this writing, it is down 13% for the day, and its current trajectory doesn’t hint at a rebound. Last week, a group of troubled EV stocks, Workhorse included, experienced a slight boost on renewed investor interest following the Federal Reserve’s interest rate pause.
While the momentum has clearly subsided since then, WKHS stock could turn around if market conditions shift in its favor again. The company seems to be highly focused on growth, despite the many obstacles it has faced since last year. As CEO Rick Dauch states:
“We have made significant progress developing and commercializing our package delivery drones, and we are pleased our customers recognize HorseFly’s market-leading specifications and capabilities. It was a privilege to conduct thorough flight demonstrations with these customers, and we look forward to expanding our relationship with them in the future. We are also continuing to hold demonstrations with additional prospective customers.”
On top of that, Workhorse operates in a growing market with plenty of potential. Recent data indicates drone pack delivery demand is expected to expand at a compound annual growth rate (CAGR) of 49% by the end of the decade, reaching a valuation of $5,556 million. That leaves plenty of room to run as it gears up to put more drones in the sky.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
