Lordstown Motors (RIDE) is an EV manufacturer based in the United States.
Recently, the company delivered a lower-than-expected third-quarter loss of $0.54 per share. Material shortages, as well as supply chain challenges, continue to remain a sore point for the company.
Let’s have a look at what’s changed in the company’s risk factors that investors should know. (See Insiders’ Hot Stocks on TipRanks)
Lordstown Motors Risk Factors
According to the new Tipranks Risk Factors tool, Lordstown Motors’ main risk category is Finance & Corporate, which accounts for 42% of the total 59 risks identified. The next two major risk factor contributors are Production and Legal & Regulatory, which stand at 20% and 12%, respectively.
Lordstown Motors has added two risk factors under Finance & Corporate category.
To begin, Lordstown Motors cautions that, as a capital-intensive firm, it may require considerable additional money to achieve its business strategy and operate. However, because the firm has suffered losses in the past and could continue to do so in the future, raising money on reasonable conditions may be challenging.
Second, Lordstown Motors stated that its recent Asset Purchase Agreement with Foxconn, one of the world’s leading electronics manufacturers, may not be completed due to closing conditions such as the negotiation of further agreements and other regulatory issues. The unfinished deal might have a significant influence on the company’s financial state and operations. Lordstown Motors also advises investors that even if the purchase goes through, the business may not be able to fully achieve the projected advantages owing to a variety of issues, including supply chain interruptions.
The overall sector average for the Finance & Corporate risk factor is 34%.
Wall Street’s Take
Following the Q3 earnings announcement, RBC Capital analyst Joseph Spak recently reiterated a Sell rating on Lordstown Motors stock but decreased his price target to $4 from $5. Lordstown Motors’ new price target suggests 29.6% downside potential.
Consensus among analysts is a Moderate Sell based on five Hold ratings and three Sell ratings in the last three months. The average RIDE price target is $6, reflecting a potential 12-month upside of 5.6% from current levels.
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