With the new Hold rating, six analysts cover QuantumScape. Only two rate shares Buy.
Courtesy QuantumScape
After a long stretch of up and down moves, stock in electric-vehicle battery technology company QuantumScape has settled down. Less volatility might help investors value the shares. So will another rating from Wall Street.
Wolfe Research automotive analyst Rod Lache launched coverage of QuantumScape (ticker: QS) with a Hold rating and a $25 price target. Shares were down 0.7%, at $27.16, in recent trading.
Details from the report aren’t available, but a Hold rating is generally a lukewarm take from the Street. The S&P 500 and Dow Jones Industrial Average are both up about 0.1%.
With the new Hold rating, six analysts cover the company. Only two rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
Lache’s $25 price target is the Street’s lowest, according to Bloomberg, and well below the average analyst target of about $44 a share. QuantumScape price targets are all over the place, ranging from $25 to $70. The $45 bull-bear spread is about 163% of the current stock price. The average bull-bear spread for S&P stocks is closer to 50%.
Recent trading in the stock is one reason for the wildly diverging analyst opinions on value. QuantumScape shares traded as high as $132.74 in December, shortly after the company released positive data from its battery programs.
QuantumScape is working on solid-state batteries for automotive EV applications. It promises better range, cost, charge time, and safety. But the technology is tricky. QuantumScape doesn’t expect to have significant sales until the middle of the decade.
That time frame, and the newness of the technology, are a perfect recipe for volatile stock trading, which is what investors have had to endure. Shares have been trading a little better lately. The stock is down about 1% over the past month.
Maybe less volatility will give investors the chance to review QuantumScape’s valuation, and its business prospects, in greater depth.
Write to Al Root at [email protected]
