Earlier this year, electric vehicle battery manufacturer QuantumScape (NYSE:QS) seemed to be on the cusp of a comeback. QS stock was unstoppable for a little while, even though there was no company-specific catalyst. Reality could set in quickly, though, so it’s wise to maintain a safe distance from QS stock for the time being.
To modify an old but useful saying from Benjamin Graham and Warren Buffett, the stock market is a voting machine in the short term and a weighing machine in the long term. Always remember, sentiment drives stock prices in the immediate term, and markets aren’t always moved by rational thinking.
Don’t misunderstand. QuantumScape could offer significant value to its shareholders eventually. For the remainder of 2023, however, caution is advised, and it’s not necessary to jump into a hasty trade with QuantumScape right now.
| QS | QuantumScape | $8.32 |
What’s Happening with QS Stock?
QS stock zoomed from $5.40 to $8.50 in January. So, onlookers might assume that there must have been some amazing news coming from QuantumScape during this time.
However, the company’s press releases page shows no news items from January. As it turns out, there really wasn’t any notable company-specific news to justify such a huge share-price rally.
It’s entirely possible that meme-stock traders, or at least amateurs hoping to catch the next big trend, were involved. They’re not reliable, as the market’s voting machine is susceptible to rapid changes at any given moment. Thus, it shouldn’t be too surprising that QS stock lost momentum and turned south in early February.
Could There Be a Saint Valentine’s Day Massacre with QS Stock?
This Wednesday, Feb. 14, QuantumScape will release its fourth-quarter 2022 financial results. It’s no secret that QuantumScape is unprofitable and has “not derived revenue from its principal business activities.”
So, what exactly are the hyped-up amateur traders expecting to happen on Feb. 14? On the financial front, it could be the equivalent of the Saint Valentine’s Day Massacre: potentially no revenue, almost certainly no earnings and lots of spending to keep the company in operation.
Sure, QuantumScape shipped out its 24-layer prototype lithium-metal battery cell to automotive manufacturers. That’s old news now, though. QuantumScape’s management has previously stated that the company’s battery production will begin by 2024.
It will likely take a while, though – maybe several more years after production commences – for QuantumScape to achieve profitability. In the meantime, investors’ patience could fray quickly and the amateur traders might already be moving on to the next shiny object in the markets.
What You Can Do Now
QuantumScape’s battery cell technology could be a game-changer eventually. But are you willing to possibly wait years, hoping that QuantumScape achieves profitability at some point?
Cautious investors might not be willing to take that chance. Therefore, QS stock gets a “D” rating and it might be fine for a tiny, speculative position but loading the boat isn’t a wise strategy in 2023.
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.