Analyzing Volta’s Newly Added Risk Factors

Volta (VLTA) is an electric vehicle charging company based in California. The company recently marked a milestone of delivering 100 million miles to electric vehicle drivers across the U.S.

Volta has secured a deal to set up charging locations at Six Flags Entertainment’s theme parks across the country to serve the parks’ guests. It has also launched an artificial intelligence-powered infrastructure planning solution that Southern Company has agreed to use for multiple years for its transportation electrification programs.

With this in mind, let’s look at the company’s financials and understand what has changed in its risk factors. (See Analysts’ Top Stocks on TipRanks)

Q3 Financial Results

Volta’s Q3 2021 revenue of $8.5 million increased 77% year-over-year but missed the consensus estimate of $10.1 million. It posted a loss per share of $0.58 during the quarter, which was narrower than the loss of $1.56 per share in the same quarter last year. Volta ended the quarter with $331 million in cash. (See Volta stock charts on TipRanks).

Risk Factors

According to the new TipRanks’ Risk Factors tool, VLTA’s main risk category is Finance and Corporate, which accounts for 40% of the total 70 risks identified for the stock. The company has recently added 65 new risks to its profile.

Volta cautions investors to brace for fluctuations in its financial results. It has mentioned that changes in government incentive programs that impact the demand for electric vehicles could cause its revenue and expenses to fluctuate sharply on a quarterly basis. It warns that the fluctuations could also adversely affect its stock price. Further, it says, fluctuations in cash flow could lead to liquidity problems.

The company cautions that its market opportunity estimates and growth projections are subject to significant uncertainty and may prove to be inaccurate. It mentions that electric vehicle adoption rates, market share capture, and charging demand and pricing are difficult to predict. The company further cautions that even if the market develops as projected, its business may fail to grow at similar rates.

Volta informs investors that it may need to raise additional funds in the future to expand its operations. However, it says that the funds may not be available when needed. Further, the company observes that fundraising through debt securities would require interest payments and may subject it to unfavorable terms. Additionally, the company says that fundraising through equity securities could cause dilution to existing shareholders.

Volta warns that its products and services may become obsolete if it fails to keep pace with the constantly changing electric vehicle charging technologies. The company acknowledges that upscaling its infrastructure to align with the latest charging technologies could involve significant costs that would adversely impact its financial condition.

Most of Volta’s risk factors come under the Finance and Corporate category and are in tandem with the sector average at 40%. Shares of the company have gained 14% year-to-date.

Analysts’ Take

Following Volta’s Q3 earnings report, Needham analyst Vikram Bagri reiterated a Buy rating on Volta with a price target of $13. Bagri’s price target suggests 7.44% upside potential.

Consensus among analysts is a Strong Buy based on 4 Buys. The average Volta price target of $13.63 implies 12.64% upside potential to current levels.

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