QuantumScape (QS) stock surged 16% today after TD Cowen analyst Gabriel Daoud dramatically raised his price target to $16 from $5, citing improved commercial visibility and ecosystem expansion following the company’s Q3 update.
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Analyst Says Commercialization Edges Closer
Despite maintaining a Hold rating, Daoud’s sharp upward revision reflects confidence in QuantumScape’s path to commercialization. He updated his target after the company reported encouraging Q3 developments, such as active engagement with a top global automaker, which signals rising interest in its solid-state battery tech.
Also, progress in its partnership with Murata Manufacturing (MRAAF), a Japan-based electronics and battery components provider, is encouraging.
Importantly, the company began shipping its QSE-5 prototype cells in Q3, marking a key milestone in its Cobra manufacturing process. The analyst believes these updates bring the Cobra process one step closer to commercialization at scale.
QuantumScape’s Road Ahead
It must be mentioned that at the Q3 earnings report, QuantumScape posted its first-ever customer billings of $12.8 million. Also, operating expenses were reduced to $115 million. Moreover, the company maintains a strong cash position of $1 billion, giving it a nearly 26-month runway to continue development without immediate funding pressure.
However, the path to profitability remains challenging. Also, legal headwinds, such as ongoing litigation in California, and manufacturing complexity, remain key concerns.
Is QS Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on QuantumScape stock based on one Buy, four Holds, and one Sell assigned in the past three months. At $10.50, the average QS stock price target implies a 42.75% downside potential.
