Earlier this month, Fisker Inc. (NYSE: FSR) reported 4Q 2021 results that, on balance, included more positives than negatives, particularly given the company’s current market valuation. Fisker’s share price has been approximately cut in half since mid-November 2021, following the pattern of many start up electric vehicle (EV) OEMs and other highly valued pre-revenue companies. Still, Fisker’s valuation must be considered robust: its stock market capitalization and total enterprise value are about US$3.8 billion and US$3.3 billion, respectively.
Fisker affirmed that production of its all-electric flagship Ocean SUV will commence in mid-November 2022. Unlike many EV peers which have been forced to delay manufacturing start dates for their models, Fisker has reiterated this start date for quite some time. The company hopes to reach a monthly production rate of 5,000+ vehicles during 2023. The Ocean SUV has a reasonable base price of US$37,499.
The company looks to be funded through to, and past, the start of Ocean production. Its cash balance was just over US$1.2 billion as of December 31, 2021, while the company expects to incur combined cash operating expenses and capital expenditures of US$715-US$790 million over the full year 2022.
Reservations for the Ocean SUV have increased dramatically over the last 3 ½ months, reaching more than 30,000, up from around 18,600 in early November 2021. Reservations cost US$250 and are refundable, net of a 10% restocking fee.
|Date||# of Ocean SUV Reservations||Comment|
|14-Feb-22||> 30,000||Includes 1,600 fleet reservations. Current annualized pace is 55,000.|
|2-Nov-21||18,600||Includes 1,400 fleet reservations.|
|2-Aug-21||~17,500||Includes 1,400 fleet reservations.|
Fisker also noted it has received interest from both retail and commercial customers for its proposed second EV, the PEAR (Personal Electric Automotive Revolution) crossover vehicle. The PEAR, which has a remarkably low announced US$29,900 sticker price, could reach customers beginning in 2024.
Less constructively, Fisker’s cash burn rate increased markedly to US$193 million in 4Q 2021 from US$119 million in 3Q 2021. This cash burn rate should stay elevated at about the 4Q 2021 level through the first two or three quarters of 2022.
|(in thousands of US $)||December 31, 2021||September 30, 2021||June 30, 2021||March 31, 2021|
|Total Cash Burn||($193,452)||($119,288)||($28,442)||($94,475)|
As of December 31, 2021, Fisker’s cash balance was US$1.203 billion, down from US$1.4 billion at September 30, 2021. In August 2021, the company raised US$667.5 million from the sale of 2.5% convertible notes (due in 2026). Fisker’s cash position equals about 36% of its stock market capitalization.
|(in thousands of US $, except for shares outstanding)||December 31, 2021||September 30, 2021||June 30, 2021||March 31, 2021|
|Operating Cash Flow||($140,895)||($103,450)||($28,117)||($28,810)|
|Debt, Primarily Convertible Debt||$678,893||$678,983||$20,206||$2,448|
|Shares Outstanding (Millions)||~297.0||~298.0||~298.0||293.6|
If Fisker were to encounter difficulties in reaching its fall 2022 target of commencing Ocean SUV production, Fisker’s shares could be negatively affected. Also, a further downturn in EV investor sentiment could hurt the stock.
Fisker is well positioned versus its start-up EV peers. It has sufficient cash to bring its flagship Ocean SUV to market later this year, and consumers and fleet buyers appear to like it based on rising reservation statistics. On the other hand, Fisker has recorded negligible lifetime revenue, yet carries a robust US$3.8 billion stock market valuation.
Fisker Inc. last traded on the NYSE at US$11.94.
Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.