Fisker Stock Price Up 35% in 2021 – Time to Buy FSR Stock?

EV (electric vehicle) stocks are back in action after sagging for about six months. There has been a strong upwards momentum in EV stocks including Fisker (FSR) over the last month. What’s the forecast for FSR stock and is it a good buy now?

Fisker stock is up about 35% for the year. However, it is still down 38% from the 52-week highs. The company went public through a SPAC reverse merger and at one point it had even fallen below the SPAC IPO price of $10. However, it has seen strong momentum over the last month.

FSR stock technical analysis

FSR stock is trading above its 50-day, 100-day, and 200-day SMA (simple moving average) which is a bullish indicator. There is also a golden cross formation in the stock as its 50-day SMA has crossed above the 200-day SMA. While the golden cross is a lagging indicator and is preceded by an upwards price action in the stock, it is nonetheless a key bullish technical indicator.

Fisker stock has a 14-day RSI (relative strength index) of 54.3 which is a neutral indicator. However, its 12,26 MACD (moving average convergence divergence) gives a sell signal. That said, the stock is otherwise looking bullish on the charts and should find a strong support near these price levels.

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Fisker stock recent news

Earlier this month, Fisker Ocean won the inaugural zero-emission vehicle award which was dubbed THE ZEVAS at the LA Auto show. Notably, Ocean is the first model from Fisker and would be produced by its production partner Magna in Austria. For its second model named Project PEAR, FSR has partnered with Foxconn. Foxconn has been betting on electric cars and has also acquired the Lordstown plant from cash-starved Lordstown Motors. It would now produce the company’s first pick-up called Endurance at the facility. However, Lordstown has now extended the delivery timeline for Endurance to the third quarter of 2022.

FSR to deliver cars in the fourth quarter of 2022

Fisker would begin the deliveries of its Ocean SUV from the fourth quarter of 2022. The company has priced the Ocean SUV beginning $37,499 which looks quite competitive. The starting model would have a range of around 250 miles. The higher-end model would cost around $65,000 and would have a range over 350 miles.

Notably, Fisker’s CEO Henrik Fisker has previously also tried his hand at electric vehicles. However, despite the generous support from the government the model Fisker Karma flopped and Fisker Automotive went bankrupt and the US government could only partially recoup the investment that it made in the company.

Fisker is mitigating the execution risk

Startup EV companies face execution risk. However, Fisker is trying to mitigate the risk by partnering with experienced partners. According to Fisker, “We have a whole asset-light business model — it’s a little bit like Apple, Foxconn, if you want — in terms of we concentrate on the product, the marketing, the design, the development, and then we outsource manufacturing.” He added, “We don’t have to put thousands of dollars [in] each car because we have to keep the lights on in the factory, and pay real estate taxes and whatever it all is.”

FSR-CATL partnership

Notably, for the batteries, Fisker has partnered with battery giant CATL which would supply different batteries for its cars. For instance, CATL would supply LFP (lithium iron phosphate) battery cells for the lower-priced Fisker Ocean Sport and nickel manganese cobalt cells for the models that have a higher range.

Tesla had also accused Fisker of stealing its designs in a lawsuit. However, the lawsuit was settled in Fisker’s favor.

Fisker stock forecast

The outlook for Fisker looks positive considering the value proposition for its models. Wall Street analysts are also reasonably bullish on the stock and seven of the 12 analysts rate it as a buy or some equivalent. Four analysts have a hold rating while one analyst has a sell rating on the stock. Its median target price of $25.50 is a premium of 28.9% over current prices. The street high target price of $40 implies more than 100% upside over current prices. However, the street low target price of $11 is a 44% discount over current prices.

FSR stock target price

Over the last month, Bank of America and Cowen have raised FSR’s target price. Credit Suisse initiated coverage on the stock with an outperform rating and $32 target price. “With electric vehicle (EV) uptake sharply inflecting and the market lacking sufficient model options, Fisker offers a compelling value proposition – sleek product at a high-volume price point. Leveraging a de-risked business strategy, Fisker can accelerate development speed and path to scaled production while also unlocking lower price points,” said Credit Suisse in its note.

Fisker stock long-term forecast

The long-term forecast for Fisker looks positive looking at the global pivot towards electric cars. The company has also embedded solar panels into the Ocean SUV which would further add to its range. Sono Motors, that listed earlier this month only, is focusing on electric cars with solar panels embedded. While the Ocean SUV would add only about 1500 miles per year from solar energy, Sono Motors is targeting a much higher range from solar energy.

So far, Fisker has about 20,000 pre-orders for the Ocean SUV. If the company can scale up the production and come up with a product that consumers admire, demand shouldn’t be a concern. Most other EV companies including Tesla are capacity constrained and can sell only as many cars as they produce.

Should you buy FSR stock?

FSR has a market cap of around $6 billion. Since it’s a pre-revenue company, we can’t value FSR based on the financial metrics. Looking at other EV stocks, Tesla is a $1 trillion company while Rivian and Lucid Motors have a market cap of $95 billion and $85 billion respectively. Both Rivian and Lucid Motors listed this year only and have only recently started delivering cars. However, unlike Fisker, all these three companies produce cars at their own plants.

That said, Fisker looks like a good EV stock to buy now. As the company moves forward with its delivery plans, it could see more upside from these levels. The company’s de-risked business model, where it has partnered with industry heavyweights like CATL and Magna is an added advantage.

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