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Polestar Incurs $242M Operating Loss in Q2, Eyes Recovery in 2H24
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Swedish electric vehicle (EV) maker Polestar Automotive (PSNY - Free Report) released its second-quarter 2024 results yesterday. The company delivered 13,150 vehicles in the quarter, indicating an 82% jump on a sequential basis. Revenues came in at $575 million, down 17% year over year, owing to generous discounts amid the competitive EV landscape.
PSNY incurred an operating loss of $242.3 million for the three months ended June 30, narrower than $273.6 million incurred in the year-ago quarter. Nonetheless, the loss underscores the challenges the company is experiencing, including high competition, rising costs and pricing pressure. Polestar exited the second quarter with cash/cash equivalents of $669 million. The company expects the second half of 2024 to fare better than the first half, thanks to the growing sales of two premium SUVs — Polestar 3 and 4.
Since its spin-off from Volvo two years ago, Polestar’s share price has plummeted more than 90%. To navigate these turbulent waters, the company has announced a leadership change. Michael Lohscheller, the former chief of Opel, will replace CEO Thomas Ingenlath in October, taking charge of Polestar’s efforts to ramp up production and improve financial performance. Lohscheller’s appointment comes as Polestar seeks to address slower-than-expected EV adoption, exacerbated by high borrowing costs pushing consumers toward more affordable gasoline-electric hybrid vehicles.
The company remains optimistic, especially with the expected boost in sales from its new premium SUV models, Polestar 3 and 4, which are anticipated to help the company achieve its target of selling over 155,000 vehicles by 2025. To bolster its operations and sidestep the tariffs on Chinese-made EVs, Polestar has begun production of the Polestar 3 in the United States. This model, priced at $73,400, is now being assembled at a Volvo factory in Ridgeville, SC, after delays related to software issues.
As part of its strategy to secure necessary funding for growth, Polestar obtained a $950 million loan from a bank syndicate in February. In August, PSNY secured an additional $300 million loan, bringing its total external funding to the targeted $1.3 billion. With new models hitting the market and a renewed focus on operational efficiency, Polestar is determined to regain its footing in the competitive EV market and aims to break even on cash flow by 2025.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 30 days.
The consensus estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21% and 14.7%, respectively. EPS estimates for 2024 and 2025 have improved 14 cents and 19 cents, respectively, in the past 30 days.
The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.6% and 215.9%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 30 days.
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Polestar Incurs $242M Operating Loss in Q2, Eyes Recovery in 2H24
Swedish electric vehicle (EV) maker Polestar Automotive (PSNY - Free Report) released its second-quarter 2024 results yesterday. The company delivered 13,150 vehicles in the quarter, indicating an 82% jump on a sequential basis. Revenues came in at $575 million, down 17% year over year, owing to generous discounts amid the competitive EV landscape.
PSNY incurred an operating loss of $242.3 million for the three months ended June 30, narrower than $273.6 million incurred in the year-ago quarter. Nonetheless, the loss underscores the challenges the company is experiencing, including high competition, rising costs and pricing pressure. Polestar exited the second quarter with cash/cash equivalents of $669 million. The company expects the second half of 2024 to fare better than the first half, thanks to the growing sales of two premium SUVs — Polestar 3 and 4.
Since its spin-off from Volvo two years ago, Polestar’s share price has plummeted more than 90%. To navigate these turbulent waters, the company has announced a leadership change. Michael Lohscheller, the former chief of Opel, will replace CEO Thomas Ingenlath in October, taking charge of Polestar’s efforts to ramp up production and improve financial performance. Lohscheller’s appointment comes as Polestar seeks to address slower-than-expected EV adoption, exacerbated by high borrowing costs pushing consumers toward more affordable gasoline-electric hybrid vehicles.
The company remains optimistic, especially with the expected boost in sales from its new premium SUV models, Polestar 3 and 4, which are anticipated to help the company achieve its target of selling over 155,000 vehicles by 2025. To bolster its operations and sidestep the tariffs on Chinese-made EVs, Polestar has begun production of the Polestar 3 in the United States. This model, priced at $73,400, is now being assembled at a Volvo factory in Ridgeville, SC, after delays related to software issues.
As part of its strategy to secure necessary funding for growth, Polestar obtained a $950 million loan from a bank syndicate in February. In August, PSNY secured an additional $300 million loan, bringing its total external funding to the targeted $1.3 billion. With new models hitting the market and a renewed focus on operational efficiency, Polestar is determined to regain its footing in the competitive EV market and aims to break even on cash flow by 2025.
Zacks Rank & Other Key Picks
PSNY currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) , BYD Co Ltd (BYDDY - Free Report) and Blue Bird Corp. (BLBD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 30 days.
The consensus estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21% and 14.7%, respectively. EPS estimates for 2024 and 2025 have improved 14 cents and 19 cents, respectively, in the past 30 days.
The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.6% and 215.9%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 30 days.