Is Fisker a Buy After Announcing a Deal with Foxconn?

: FSR | Fisker Inc. News, Ratings, and Charts

FSR – Electric Vehicle (EV) maker Fisker (FSR) has been making headlines after inking a major deal with Chinese EV manufacturing company Foxconn. However, because production of its EV model (Project PEAR) is not expected to begin until the fourth quarter of 2023, the company’s sales prospects remain far off. Further, a global semiconductor chip shortage and growing competition in the EV space could be major headwinds for the stock. Read on.

Founded in 2016, Fisker, Inc. (FSR) is a designer and manufacturer of sustainable electric vehicles and advanced mobility solutions. Its shares have declined 14.6% over the past month on investors’ concern surrounding rising competition in the EV space.

FSR recently entered an agreement with Foxconn to develop a new breakthrough EV under “Project PEAR”. While the joint venture could enhance FSR’s manufacturing capabilities, it will require a significant amount of time before it begins generating revenue for the company.

Furthermore, the company will not record earnings growth until it begins production of its first automobile, the Fisker Ocean SUV, in the fourth quarter of 2022. In fact, analysts expect FSR’s EPS to decline 112.5% in 2021.

Click here to checkout our Electric Vehicle Industry Report for 2021

Here is what we think could influence FSR’s performance in the near term:

Lagging in the EV Race

FSR has not yet started producing and selling  vehicles commercially. The company intends to start selling its Fisker Ocean vehicles in the fourth quarter next year. In fact, FSR plans to begin the production of its second EV model, Project PEAR, in partnership with Foxconn in 2023. While its peers, including Nio Inc. (NIO), Volkswagen AG (VWAGY), and XPeng, Inc. (XPEV) are intensifying their efforts to launch superior models and ramp up EV production, FSR’s Ocean SUV launch runs the risk of being  overshadowed.

Global Chip Shortage to Mar Growth

While government initiatives worldwide  to transition to zero-emission vehicles have certainly increased the demand for EVs, the near-term growth prospects of many companies in this sector, including FSR, look uncertain due to the global shortage of semiconductors. Since EVs are heavily dependent on these chips, the shortage could  hurt EV manufacturers in the near term.

Bleak Financials

FSR reported $22,000 in revenue in the first quarter, ended March 31. Its total operating expenses rose 5.7% sequentially to $33.10 million. The  company reported a $32.28 million non-GAAP adjusted loss from operations and a net loss of $176.84 million for this period. Its loss per share came in at $0.63.

Low Profitability

The company’s trailing-12-month cash from operations is negative $38.01 million, compared to the $209.05 industry average. Also, its trailing-12-month ROE, ROA and ROTC are negative 10.6%, 5.1% and 5%, respectively.

Unfavorable POWR Ratings

FSR has an overall D rating, which translates to Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with the weighting of each optimized to improve overall performance.

The POWR Ratings also evaluate stocks by various components, such as Growth, Momentum, and Quality. FSR has a C grade for Growth. The stock’s weak near-term growth prospects are reflected in the Growth grade.

It has a D grade for Quality and Sentiment. The company’s poor profitability and analysts’ expectations of a  weakening of its financials in the near term are in sync with these grades.

In addition to the grades we’ve highlighted, one can check out additional FSR ratings for Value, Stability and Momentum here.

FSR is ranked #43 of 53 stocks in the B-rated Auto & Vehicle Manufacturers industry.

There are several top-rated stocks in the same industry. Click here to view them.

Bottom Line

Even though FSR’s joint venture with Foxconn has raised investors’ hopes, given the time frame for production of its first and second EV models, it will be a while before the company starts generating revenues and profit. Furthermore, its lackluster financials in a competitive environment make it a highly speculative investment. So, we think it could be wise to avoid the stock now.

Click here to checkout our Electric Vehicle Industry Report for 2021


FSR shares were trading at $11.56 per share on Tuesday morning, up $0.34 (+3.03%). Year-to-date, FSR has declined -21.09%, versus a 11.46% rise in the benchmark S&P 500 index during the same period.


About the Author: Imon Ghosh


Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
FSRGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

3 Energy Stocks Set to Soar Beyond Expectations

Given the geopolitical tensions, increasing global oil demand, and supply adjustments, the energy sector is poised for robust growth. Therefore, investors might consider investing in energy stocks TechnipFMC (FTI), Weatherford International (WFRD), and ChampionX (CHX), which are poised to exceed expectations. Keep reading…

Has Carnival (CCL) Stock Turned Into a Buy After Earnings Release?

Carnival Corporation (CCL) reported record revenue in its most recent quarter but still faces a negative bottom line. The collapse of Francis Scott Key Bridge brings more uncertainty to its financials. Given these events, what stance should one take with CCL stock? Read more to find out…

3 China Stocks Positioned for Long-Term Growth

Despite facing challenges, the Chinese economy has demonstrated resilience, as evidenced by recent robust industrial output and retail sales data. Given this outlook, it might be an opportune time to own three top-notch China stocks, JD.com, Inc. (JD), China Automotive Systems (CAAS), and Youdao, Inc. (DAO). Read on…

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More Fisker Inc. (FSR) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All FSR News