Without a doubt, investors of electric vehicle battery technology company QuantumScape (NYSE:QS) have experienced frustration because QS stock chops around randomly.
They shouldn’t expect the rest of 2023 or 2024 to bring life-changing results, as QuantumScape’s shareholders will likely grow tired of the company’s lack of meaningful updates.
It’s a real shame, since the EV battery market has strong growth potential for the long term. However, this doesn’t mean investors should wager their hard-earned capital on QuantumScape in particular. As QuantumScape moves slowly on its path to commercialization, don’t be surprised if the company’s shares lose value (or at least, fail to gain significant value) in the long run.
Presentation Changes Nothing for QS Stock
One of the most frustrating things about QuantumScape is the company’s lack of frequent material updates. You might assume that the EV battery industry is rapidly changing and evolving.
Yet, you wouldn’t know this if you looked at QuantumScape’s press releases page, which isn’t updated very often.
There was an important news item from QuantumScape when the company shipped out its 24-layer prototype battery cells to automotive manufacturers. It’s been half a year since that happened, though.
Then, there was QuantumScape’s shareholder letter from April 26. Disappointingly, QuantumScape admitted that it still has “work to do to improve reliability” as the company transitions “from prototype to commercial product.”
More recently, QuantumScape released its investor presentation for June. The company’s story hasn’t really changed, however. We already knew that QuantumScape is advancing a 24-layer EV battery cell, and that the company is trying to improve “cell packaging efficiency” and increase ” quality and consistency.”
QuantumScape’s Problems Persist in 2023
It’s fine for investors to learn about the science behind QuantumScape’s battery-cell technology. So, the company’s latest investor presentation serves that purpose.
Yet, it doesn’t answer the question of when QuantumScape will finally achieve full commercialization of its products.
The June investor presentation only gives the impression that QuantumScape’s products are still unfinished. The market will not wait forever for QuantumScape to start earning revenue and achieve profitability.
Meanwhile, QuantumScape has been responsible for huge capital expenditures. The company brags about its $2 billion of capital investment, including more than $500 million “spent on development to date.”
But as the old saying goes, “Show me the money.” From a financial standpoint, all we can see is quarter after quarter of negative income. QuantumScape usually misses Wall Street’s quarterly EPS forecasts.
So, even if QS stock might pop sometimes on hopes of a short-squeeze, don’t misinterpret this as a sign that QuantumScape is a financially healthy business.
QS Stock Is Likely to Stall Out
QuantumScape is, overall, a low-conviction company in a high-conviction niche industry. Generally, QuantumScape offers meager updates with very little for investors to get excited about.
Hence, don’t expect QS stock to appreciate in value much in 2023, or in 2024, for that matter. Investors should view any quick pops in the stock as potential head-fakes. And unfortunately, QuantumScape’s long-term investors are likely to remain frustrated and disappointed.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
