Why Fisker (FSR) is Likely to Disappoint This Earnings Season

Fisker Inc.’s FSR fourth-quarter 2021 results are slated to be released on Feb 16, after the closing bell. The Zacks Consensus Estimate is pegged at a loss of 46 cents per share for the fourth quarter, suggesting deterioration from the loss of 5 cents and 37 cents incurred in fourth-quarter 2020 and third-quarter 2021, respectively. The loss estimate has been unchanged over the past 90 days.

This electric vehicle (EV) start-up — which made NYSE debut on Oct 30, 2020 — posted a wider-than-expected loss in the last reported quarter amid high operating expenses. Over the trailing four quarters, FSR surpassed estimates on three occasions and missed once, with the average surprise being 8.82%.

Key Developments in Q4

Fisker unveiled its flagship EV, the Ocean SUV, at the LA Auto Show. Fisker Ocean will be available in three variants — namely the Standard Sport, the Ultra and the Extreme — at different price points. While the base variant Ocean Sport is priced at $37,499, high-range models Extreme and Ultra are priced at $68,999 and $49,999, respectively. Fisker expects commercial production of the models to commence in November 2022.

During the quarter, Fisker inked a long-term battery supply deal with CATL, per which the latter will provide small and large battery packs to Fisker, with an initial battery capacity of more than 5 gigawatt-hours annually, from 2023 through 2025.

In December, FSR announced a collaboration with Bridgestone for comprehensive after-sales and related maintenance solutions in France and Germany.

What to Expect From Q4 Results

Fisker is set to begin production of its first vehicle, the Ocean electric SUV, in fourth-quarter 2022 and has not generated any meaningful revenues yet. Given that the company is still in its nascent stage and will take time to bring its flagship vehicle in the market, it is burning cash, which might have affected the bottom line in the quarter to be reported.

In the last reported quarter, Fisker spent $99.3 million in R&D activities, reflecting a sequential uptick of 120%. Its R&D costs for third-quarter 2021 witnessed a massive jump from $3.4 million spent in the year-ago period. The trend is expected to have continued in the to-be-reported quarter and such elevated spending is expected to have further dented the company’s margins.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Fisker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

Earnings ESP: Fisker has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Fisker currently carries a Zacks Rank of 4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Auto Stocks Poised for Q4 Earnings Beat

While Fisker’s fourth-quarter 2021 results are not likely to impress investors, below we highlight a few stocks from the auto space that are likely to pull off an earnings beat as they have the right combination of positive Earnings ESP and a favorable Zacks Rank.

AutoNation AN has an Earnings ESP of +1.97% and a Zacks Rank #2. The company is set to report fourth-quarter 2021 earnings on Feb 17.

The Zacks Consensus Estimate for AutoNation’s to-be-reported quarter’s earnings and revenues is pegged at $5 per share and $6.37 billion, respectively. AN surpassed earnings estimates in the last four quarters, with an average of 40.9%.

Genuine Parts Company GPC has an Earnings ESP of +4.87% and a Zacks Rank #2. The company is set to report fourth-quarter 2021 earnings on Feb 17.

The Zacks Consensus Estimate for Genuine Parts’ to-be-reported quarter’s earnings and revenues is pegged at $1.61 per share and $4.66 billion, respectively. GPC surpassed earnings estimates in the last four quarters, with an average of 16%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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