Electrify Your EV Exposure With Workhorse Group

Workhorse Group Has Revenue And It’s Growing

 The electric vehicle market is heating up and about to boil. Estimated at only 2.0% of the entire global automobile fleet EV is a growth opportunity that can’t be ignored. The CAGR over the next two decades is estimated in excess of 20%, that’s 20% annually for a sustained period, early investors stand to make billions in cumulative profits.

That’s why Nikola (NASDAQ:NKLA) made such big waves when it announced the deal with GM (NYSE:GM). Unfortunately for them, that ship may have sailed but it’s not the end of EV. With technology improving on a daily basis and new manufacturers springing up left and right the opportunities for investors are virtually endless.

Workhorse Group (NASDAQ:WKHS) Is emerging as an interesting story not only for its vehicles but for its progress as a manufacturer. Unlike Nikola and so many other early-phase companies, Workhorse Group has two models in production and revenue to boast of. It’s not much, mind you, but its a start, and the outlook for growth is exponential. The consensus for this year is about $22 million, the consensus for next year is about $143 million or up 550%. Based on the focus this company has, I’d say they should get ready for a flood of new orders.

 Workhorse Group Electrifies Last-Mile Delivery

Workhorse Group makes the C-Series of delivery vans. These vans are built specifically for last-mile deliveries which are the weakest link of any distribution network. The list of companies that might be interested in such vehicles are J.B. Hunt (NASDAQ:JBHT), Amazon (NASDAQ:AMZN), United Parcel Service (NYSE:UPS), and Federal Express (NYSE:FDX), just to name a few.

Importantly, Workhorse Group is the only OEM EV manufacturer of last-mile delivery trucks to receive approvals from both the Environmental Protection Agency (EPA) as well as the California Air Resources Board (CARB), permitting the Company to sell vehicles in all 50 states. California's recent move to ban internal combustion engine cars is a sign of the times. The state ranks as the 5th largest GDP market in the world and could accelerate the move of fleets into EVs by itself.

Workhorse also has a strategic partnership with Lordstown Motors. Workhorse owns a 10% stake in the company that it will retain post-SPAC-IPO later this year. Lordstown Motors is another interesting story because of two things that have nothing to do with its plans to go public. The first is that Lordstown Motors is about to start production of a fully EV commercial pickup truck that can compete with the as yet to be manufactured Nikola Badger. The second is that GM, Nikola’s would-be partner, is also a major backer of Lordstown Motors.

The Market Is Driving Workhorse Group Higher

Shares of Workhorse Group have been moving steadily higher since the company IPO’s this spring. The stock recently pulled back from a high in response to some misunderstood news coming out of Tesla. Elon Musk’s promised battery improvements aren’t coming as quickly as liked but point to cost-parity versus carbon-based fuels within a few years. While bad news for the near-term, it’s great news for the EV market and news that will ultimately aid Workhorse Group as well.

Since then shares have bounced off the short-term moving average and look like they are ready to set a new high. The indicators are tracking in line with this outlook with only one red flag that I see. While stochastic is showing a nice trend-following buy signal the MACD is yet to confirm. It looks like we’ll get a bullish crossover soon but there is risk in trading too early. There is also a risk at the all-time high, near $31, if price-action can’t break to a new high quickly we may see the stock move sideways until the next earnings report in early November. In that scenario, I would view touches to the short-term EMA and/or the $22.50 level as opportunities to buy.