The weight of evidence today - bolstered by Biden’s comments - strongly implies that Workhorse will win that USPS contract, and soon. When it comes to WKHS stock, it’s all about the USPS contract. Discounted back by 8% per year, that implies a 2021 price target of over $40. Based on a 20X forward earnings multiple, that implies a 2029 price target for WKHS stock of $80. Operating margins could clock in around 15%.Īll in all, these inputs imply $4 in earnings per share potential by 2030. Increased scale should drive positive operating leverage and push the opex rate down to a more normal 10% rate. I think market share will round out to about 20% by the end of the decade.Īssuming so, I see Workhorse’s revenues charging north of $5 billion in 2030. Workhorse will win the USPS contract, and leverage first mover’s advantage to turn into one of the biggest players in the domestic market. I think all 350,000 of those vans will be electric by 2030. My numbers suggest that WKHS stock will take out the $40 level in 2021.Ībout 350,000 last-mile delivery vans are sold in the U.S. To that end, Workhorse winning the USPS contract optimally positions the electric delivery van maker for a decade of hypergrowth ahead.īehind that decade of hypergrowth, WKHS stock will soar. Those are winning attributes which will likely attract many, many new customers to Workhorse over the next few years, as almost all logistics companies in the world follow USPS and electrify their fleets. Thus, if Workhorse wins the USPS contract, this will be a company that, by 2025, will be a distinguished leader in making electric delivery vans with an unmatched ability to manufacture these vans. At the same time, thanks to the USPS partnership, Workhorse will likely be able to raise a ton of money at favorable terms to dramatically expand manufacturing capacity. In winning the USPS contract, Workhorse will cement itself as a viable leader in the electric delivery van market. It will essentially guarantee the company billions of dollars of revenue over the next few years.įor a company set to do about $1 million in revenue this year, that’s a massive deal.īut, the long-term implications of a USPS contract win for Workhorse are much bigger than the near-term revenue injection. Winning all or most of the USPS contract is a huge near-term deal for Workhorse. When the company does, WKHS stock will pop in a huge way. To that extent, I think it’s basically a done-deal. So, they’re basically out of the running, too. Biden is also pledging American-made vans. So, Oshkosh is basically out of the running. He’s pledging to electrify federal fleets. Thus, Workhorse is the “best fit” for USPS since it’s a U.S.-based company that makes electric vans.īiden basically confirmed that Workhorse will, indeed, win the contract. Sign Up for Luke’s Free Hypergrowth Investing Newsletter (And Free Special Report).The other finalist, Oshkosh - who is partnering with Ford (NYSE: F) - is proposing to make a delivery van built on an internal combustion (so it’s not electric). agency taps a Turkish company to supply its vans. One of them, Karsan, is a Turkish-based company. There are three finalists for the contract. I’ve long held the belief that, despite multiple delays, Workhorse will end up winning the enormous $8.1 billion USPS fleet upgrade contract. Thus, if Workhorse does indeed win the contract in early 2021, Workhorse stock will stage an enormous rally over the next 12 months. The entire bull thesis on WKHS resets upon that contract. Source: Stratos Brilakis / īecause in making that pledge, Biden basically confirmed that Workhorse will win the huge and significantly delayed USPS contract.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |