The average target price of QS is 4.6 and suggests 35% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 8.0. This translates into 14% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 2.5. This is equivalent to 64% downside potential in the worst case. 

QuantumScape Corporation, a development stage company, focuses on the development and commercialization of solid-state lithium-metal batteries for electric vehicles and other applications. The company was founded in 2010 and is headquartered in San Jose, California.

QuantumScape Corporation

Consumer Cyclical

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

QS reported revenue of USD 0mn in the last 12 months, down 0% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 3% from FY24 to USD -0.92. Market expects EPS to reach USD -0.98 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 6ppts over past six months and grown 63ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

Another important profitability metric, return on assets (RoA), amounted to -34.2% in the last 12 months, a decrease from -29.9% in FY23. The market analysts predict that RoA will be -30.0% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -35.6%, below the peers. 

QuantumScape Corporation reported a return on equity (RoE) of -38.5% in the last 12 months, down from -33.5% in FY23. The market consensus projects an RoE of -33.6% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.2 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

QS boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is relatively stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is very high. Among the negative credit factors, we point to negligible return on capital, inadequate interest coverage, and poor cash flow generation.

In highly turbulent market conditions, QS is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, QS is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. 

QuantumScape Corporation

$ 6.75

2

QuantumScape Corporation

$ 6.75

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 6.75

About

About

QuantumScape Corporation

$ 6.75

2

QuantumScape Corporation

$ 6.75

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 6.75

About

About

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