If we sum everything, with an exit multiple of 8.7x, the implied net present value stands at around $400 million: Finally, with an EBITDA margin of around 10%, operating margin close to 3.5%, and growing capital expenditures, I obtained 2032 free cash flow close to $120 million. The target is also expected to grow at a CAGR of 14.6%, so I assumed sales growth of 15% from 2028 to 2032. With the company claiming that it will likely sell vehicles in 2022, I assumed 2025 net sales close to $25 million. Source: Globa l Electric Trucks Market Getting Set for a Roaring The growth of the global electric trucks market is attributable to the growing adoption of battery vehicles to promote zero-emission and sustainability. With experts noting that the global electric trucks market could grow at a CAGR of 14.6% from 2021 to 2028, I believe that Workhorse's revenue growth will be close to this figure:Ī recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the global electric trucks market was worth USD 21.4 billion in 2021 and is estimated to grow at a CAGR of 14.6%, earning revenue of around USD 52.3 billion by the end of 2028. Besides, I am also optimistic about Workhorse's customer centric strategy and the company's leading tech capabilities promised in the last quarterly presentation: Keep in mind that management expects to improve its cost structure and develop LEAN systems so that free cash flow margins increase. Under normal circumstances, I believe that Workhorse will successfully execute its business plan, which will likely lead to sales growth and free cash flow generation. Q4 2021 Earnings Presentation Base Case Scenario With Successful Implementation of The Company's Customer Centric Strategy And New LEAN Systems Keep in mind that management reported $201 million in cash, and expects to report 2022 capital expenditures between $25 million and $35 million. The management also promised progressive ramp in manufacturing.įinally, I believe that Workhorse has sufficient liquidity to finance further development, design, and manufacturing of products. Under normal conditions, Workhorse expects to manufacture and sell vehicles in the second part of 2022. Management also gave some information about the year 2022 that investors may like. In my view, if new announcements are made about new agreements, the stock price could trend north: Besides, management appears to be exploring other projects with the federal and state government as well as a large retailer. The company's aerospace technology successfully received the attention of the USDA for a project. With this in mind, I expect sales growth to trend north from 2023. Keep in mind that the company expects to start producing models W56 and W34 in Q3 20. In my view, with the information released in the last quarterly report, it is a great moment to review Workhorse's future prospects. Management claims to be designing and building high performance battery-electric vehicles along with cloud-based real-time telematics performance monitoring systems. Workhorse is a tech company offering sustainable and cost-effective solutions to the commercial transportation sector. In my view, even considering the risks, in the best case scenario, the company could be worth $8.5. If we add up new production of vehicles in 20 as well as the implementation of LEAN systems, the glimpse gets even better. The company also appears to be exploring projects with the federal government and a large retailer. ( NASDAQ: WKHS) recently announced an agreement with the USDA.
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