Shares of Lordstown Motors Corp. (RIDE) jumped over 5% in pre-market trading on Thursday after the company revealed its plans to start production of its electric truck Endurance in September. However, the company reported worse-than-feared losses for the second quarter.
Based in Ohio, Lordstown Motors is an electric vehicle automaker. Lordstown’s Endurance is expected to be the world’s first full-size and fully electric pickup truck and is designed in a smarter and safer way to serve the commercial fleet market.
The company has a market capitalization of about $1 billion. (See Lordstown Motors stock charts on TipRanks)
Lordstown reported an adjusted loss of $0.61 per share, which fell short of analysts’ expectations of a loss of $0.46 per share. The company reported a loss of $0.11 per share in the prior-year period.
Markedly, the company did not report any sales numbers for the quarter, as it awaits the production of its first automobile.
Endurance Production Roadmap
The company stated that its plant is ready for production, having completed the retooling of several critical areas at its facility.
Additionally, its battery line has been fully commissioned, and its first electric hub motor line is currently under installation.
Lordstown Motors’ Executive Chairwoman Angela Strand commented, “We are launching the Endurance with a prudent ramp of production given a challenging industry and supply chain landscape.”
Sharing additional details of the Endurance production plans, Strand added, “We are on track to begin limited production at the end of September and through the fourth quarter and complete vehicle validation and regulatory approvals in December and January. This will be followed by deployments with selected early customers in Q1 in advance of commercial deliveries in early Q2, with the ramp steepening the second half of next year.”
Strand added that they are on the lookout for strategic partners to achieve maximum utilization of its “well situated, 6.2 million square foot manufacturing plant and 650 acre campus”.
Following the Q2 earnings, RBC Capital analyst Joseph Spak decreased the price target on Lordstown Motors from $5 to $1 (82.1% downside potential) and maintained a Sell rating.
Spak said, “Traditional equity offering, convertible, asset back financing, and the ATVM loan is possible. While management didn’t rule out strategic investment, it seems to us like additional capital would more likely be financial.”
Overall, the stock has a Moderate Sell consensus rating based on 1 Buy, 3 Holds, and 4 Sells. The average Lordstown Motors price target of $8.71 implies 56.1% upside potential from current levels.
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