We’ve put together all of our takeaways from Fisker’s Q4 2021 earnings call held yesterday after the stock market close.
The call was attended by Dan Galves (VP of Investor Relations who will soon be departing), Henrik Fisker (Co-Founder & CEO), Geeta Gupta-Fisker (Co-Founder, CFO, & COO), and Burkhard Huhnke (CTO). Analysts present for the Q&A included Dan Levy (Credit Suisse), Itay Michaeli (Citigroup), Jeoffrey Lambujon (Tudor), Adam Jonas (Morgan Stanley), and Pavel Molchanov (Raymond James) of which several provided reiterations of $FSR stock ahead of the stock market open today.
If you’ve listen to Fisker earnings calls in the past, there was probably something that stood out to you on yesterday’s call — a focus on revenue. That’s right, Henrik Fisker talked up revenue and rightly so. This company will soon begin to bare the fruits of its labor when start of production (SOP) commences in November 2022 and customers begin taking delivery of the Fisker Ocean.
As some would say, the company will go from zero to hero from a revenue standpoint. Not to mention, in 2024 when Fisker and Foxconn begin to deliver 250,000 Fisker Pears. The company will likely have hockey stick revenue growth when deliveries begin as they like other major EV companies (e.g., Tesla, Lucid) can’t make cars fast enough for the demand. This is all on top of Fisker’s plans to have two additional vehicles, four segment leading products in all, in production before 2025.
Some of the key takeaways from the earnings call include:
- Design is #1; customers love leading class features but design is everything (based on internal survey of reservation holders); sustainability and commitment to ESG is #2; customers love the idea of the world’s most environmentally-friendly electric vehicle.
- Fisker Ocean differentiators — cool design, industry-leading features, and price is what is driving reservations (e.g., sustainability such as vegan interiors, solar roof, torque-vectoring system, California Mode, 17.1-inch rotating screen, basic warranty of 6 years / 60,000 miles, powertrain and battery warranty of 10 years / 100,000 miles).
- Acceleration of reservations has taken off this year; 400% increase per day versus 2021.
- Journalist and customers to test drive this Summer.
- Fisker is working hard with Magna to have a “amazing high-quality launch in November this year.”
- Fisker has been working with key suppliers to shore up any supply chain issues (e.g., chips); continuously monitor potential shortages of components; making tradeoffs where necessary.
- Asset-light business model and design process helps with developing a low-cost vehicle with the latest technology.
- Fisker passed one of their first engineering milestones on the PEAR program (exterior design is mostly locked).
- Interest from global auto rental companies; several major deals in the works; Fisker will offer dozens of over-the-air upgrades that rental car partners can upsell to customers to make extra money on.
- 80% of Fisker Ocean reservation holders are planning to buy one of the two top trims (average selling price of about $56,000).
- Fisker passed 31,000 orders (that has only increased since the earnings call, near 32.5k orders including Pear as of this morning); potential revenue of $1.7 billion.
- Industry-leading configurator coming out late this summer.
- Fisker doesn’t see any problem with reaching 50,000 reservations this year based on current trajectory.
- Currently testing vehicle dynamics calibration and tuning in Italy; cold-weather testing in Sweden.
- Fisker’s software-driven ADAS architecture will enable a further leap in safety features and will support Level 3 advanced driver assist functions; highest resolution displays with cutting-edge graphic processors.
- Year-end cash balance of $1.2 billion; Fisker has the resources to fund the Fisker Ocean program launch in November and to stay on track with their other projects in 2022.
- CapEx guidance for 2022 is $715 million to $790 million; compared to a total of $458 million in 2021.
- Sharing of components and intellectual property will help Fisker further optimize R&D and CapEx investments.
- Implemented several IT systems from ERP, CRM, PLM, as well as several platforms to create a seamless IT architecture that can be scaled for all vehicle programs and customers worldwide.
Analysts that attended the call had an overall positive reception with several of them providing updates on their previous stock rating:
- Morgan Stanley lowered price target to $30 from $40 and maintains Overweight rating.
- Citi analyst lowered price target to $29 from $30 and keeps Buy rating.
- RBC lowered price target from $26 to $19 and maintains an Outperform (speculative risk) rating.
- Credit Suisse lowers price target to $25 and maintains Outperform rating.
- R.F. Lafferty Equity Research with a $21 price target and a Buy rating initiation.
As of this writing, FSR is trading at $12.85 down -0.39% on the day with 11.3 million in volume with all indices negative on the day (S&P 500 -1.54%; Dow -1.34%; Nasdaq -2.15% and Russell 2000 -1.85%).
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