We are looking at Workhorse Group (WKHS) today.
Why Workhorse Group (WKHS) stock jumped today?
Shares of Workhorse Group (WKHS) were up more than 18% on Wednesday. It seems that the company is getting a nod of approval from financial analysts and investors alike. As an example, BTIG analyst Gregory Lewis almost doubled his price target for the stock. It also didn't hurt for the stock to join the Russell 3000® index, which brings more attention, media, and analysts coverage.
So, what's all the fuss about?
Founded in 2007, the company already has nearly 400 vehicles on the road. The company has a partnership with USPS to manufacture electric delivery vehicles for the United States Postal Service. The company is already delivering its product to customers such as UPS. More interesting is the company's last-mile delivery vehicles that are equipped with delivery drones. The last-mile delivery market is an $18 billion market opportunity, and Workhorse has a head start. What has caught investors' attention is the recent partnership with Lordstown Motors, who plans to license and manufacture electric pickup trucks utilizing the Workhorse's W-15 Technology.
The bothersome aspect of the company's operations is its balance sheet. It has a high debt-to-equity ratio, and its earnings are not enough to cover its debt obligations. Despite the steady progress and rapid revenue growth the company is making, this is a risky bet for investors who are in love with the electric truck market. Check out the company's Stock Card before you decide what to do with it. Here you go ...
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We are looking at Boeing (BA) today.
Why Boeing (BA) stock fell today?
The news is that airlines have gradually started to cancel their 737 Max orders, which means the company will have a tough time moving its already 400 manufactured planes. This corporate crisis is much deeper and lingering longer than most investors had previously expected.
Moreover, a 52-page report is expected to get released on Wednesday by the U.S. Department of Transportation's Office of Inspector General (IG) to outline what has gone wrong during the certification process of 737 Max jets that ended up causing two fatal crashes.
Boeing's story is a perfect reminder to investors that corporate crises last much longer than we all expect. There is no rush to buy the dip. True dips are extremely painful. True dips are hard and agonizing, and they typically take longer than expected to recover. This means to generate an outsized return from a stock dip, and you need to be extremely patient. Visit Boeing's Stock Card to review the 737 Max's impact on the company in more detail.
Investing in companies such as Boeing takes patience. If you choose to invest in it to benefit from its lower historical price, you need to have a long-term horizon as part of something like a retirement account with decades of waiting time. Personal Capital is an excellent platform we came across to manage your long term goals. Check it out:
We are looking at Uber (UBER) and Lyft (LYFT) today.
Why Uber and Lyft stocks fell today?
Shares of Uber and Lyft were down almost 8% each on Wednesday. The news broke that California may be moving rapidly toward forcing the two companies to hire their drivers as employees.
If California succeeds in forcing the so-called gig economy companies such as Uber and Lyft to hire their independent contractors, it leads to a significant hit to those already unprofitable companies' margins. California says if your business is giving people a taxi ride, you have to own and be responsible for what moves people. The drivers are the business of Uber and Lyft, and they have to be the employees of Uber and Lyft.
In a way, California is questioning the future of the so-called gig economy and independent contractors for everything.
We are looking at Salesforece.com (CRM), today.
Why did Salesforce.com stock fell today?
Shares of Salesforce were down almost 2% on Tuesday. The price decline can be in anticipation of the next week's earnings reports and due to investors locking their gains before the earnings. Overall, it's a bit surprising to see that the price decline considering the joint announcement with Siemens (Ticker: SIEGY).
The two companies are making a system that can enable companies returning to work safely. Siemens connects its products with Salesforce's work.com, traces the employee's movements, and warns them if the number of a room's occupants exceeds a certain threshold.
This is an example of a technology company that can explore a new business opportunity without much friction. This is how a technology company can come up with a new revenue opportunity that was never forecasted by investors had they only been using historical data. We don't know if this means new revenue for Salesforce, but we just enjoy observing how the company can slide and find its way into new revenue opportunities.
We are looking at Fastly (FSLY), today.
Why did Fastly stock jump today?
Shares of Fastly (FSLY) were up more than 16% on Monday. The stock has grown more than 270% since the start of 2020 and just received new "buy" and "strong-buy" recommendations by financial analysts.
The company is benefiting from the transition of the world to digital lives. It enables faster delivery of content via what's known as the "edge cloud." According to the CEO, all content on the internet can benefit from the "edge cloud" and move away from legacy systems while being secured at the "edge." The company only has 300 customers, and its closest competitors have thousands of customers, and it is only starting to grow.
Despite being a recent IPO, and not generating profit or free cash flow, the momentum of the market is driving the stock further, and investors continue to stay optimistic about the future of Fastly.
The concerning aspect of the stock is trading at 25 times its sales. So, the decision is whether the growth rate can justify the stock's high price. This is canbe an addition to your watchlist as both a speculative and long-term hold. Make sure you have a look at the company's Stock Card, before making a decision.
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