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“All I know is what I read in the newspapers, and that’s an excuse for my ignoranceWill Rogers
Today, we take our first in-depth look Hylian Holdings Corporation (NYSE:HYLN), The company went public in late 2020 through a merger with SPAC called Turtle Acquisition. Like many EV related concerns that started to market in 2020 and 2021 through this method, the stock has been an absolute train wreck for original shareholders. After its heavy sell-off, can the equity rebound in the coming quarters? We examine that question through the analysis given below.
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Company Overview:
Hyliion Holdings Corporation is located just outside Austin, Texas. The company manufactures and sells electrified powertrain solutions for the electric vehicle industry. Hyliion provides battery management systems and battery packs for hybrid and fully electric vehicle applications. Shares go for just over $3.50 and sport an estimated market capitalization of $525 million.
February Company Presentation
The company tells about itself Website that its:
“The ERX solution transforms the existing fleet and delivers the desired efficiency effect: zero or even negative emissions with a substantial reduction in operating costs over time.,
This includes the Hybrid EX unit that converts a diesel truck into a diesel/electric hybrid via an electric axle and an auxiliary power train with battery that bolts to any diesel truck chassis. It costs just over $25,000 per conversion.
The company is also focusing on testing and bringing its ERX hypertruck to market. This truck has a natural gas generator that charges the battery to power the drivetrain. The vehicle is targeting up to 1,000 miles between refueling stops, compared to current EV plug-in solutions that can travel only 100 to 200 miles per charge.
February Company Presentation
First quarter results:
On May 9, the company posted first quarter figures. Hyliion suffered a GAAP loss of 16 cents per share on revenue worth only $340,000, both of which slightly exceeded expectations. As of quarter-end, Hyliion had an order backlog of 170 Hypertruck ERX production slots backed by deposits, with approximately 2,000 units still in reservations to date. It announced a deal this week for another 10 production slots backed by deposits. For FY2022, the company expects between $2 million and $3 million in revenue against $135 million to $145 million in operating costs.
Analyst Commentary and Balance Sheet:
The analyst community is not optimistic about Hyliion’s prospects. Since late February, four analyst firms, including UBS and Barclays, have reiterated or downgraded the stock to a neutral or hold rating. Two of these included significant downside price target corrections. Proposed price targets range from $3 to $5 per share.
The big drop in the stock hasn’t attracted insider buying so far. In fact, the company’s CEO sold roughly $1.8 million worth of shares in early February, and Hyliion’s chief technology officer settled his stake worth more than $225,000 in late April. Just over 12% of the outstanding float in shares is currently kept short. The company ended the first quarter with $227 million in cash and cash equivalents, as well as short-term investments of $134 million and long-term investments of $166 million.
Decision:
The current analyst consensus has caused Hyliion to lose about 80 cents per share on minimum revenue in fiscal 2022. Expressed as an excerpt on Seeking Alpha earlier this year, it’s not where management envisioned it would be in 2022 when it first went public.
According to an IPO document, the company intends to sell over 4,000 of its Hybrid EX units as well as 2500 hypertrucks in FY2022. Instead, based on the midpoint of recent revenue guidance, the company expects just under 100 Hybrid EX units to be delivered this year, while its Hypertruck is still in the testing phase and probably 12-18 months from commercialization. is out.
At present, the company’s balance sheet looks solid. Apart from this, it is hard to find more positives in the company’s journey as a public company till date. Unless management demonstrates a consistent ability to meet milestones, stocks should be avoided.
“Those who are capable of committing tyranny are capable of giving perjury to perpetuate it”lysander spooner
Brett Jensen is the founder and author of Biotech Forum, Busted IPO Forum and Insiders Forum.
