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What's in the Offing for Hyliion (HYLN) This Earnings Season?

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Hyliion Holdings Corporation (HYLN - Free Report) is scheduled to release fourth-quarter 2020 results on Feb 23, after the bell. The Zacks Consensus Estimate is pegged at a loss of 14 cents per share for the quarter.

In the last reported quarter, this Texas-based company registered net loss per share. Moreover, Hyliion has not generated any revenues yet. For the nine-month period ended Sep 30, 2020, the firm’s operating expenses totaled $11.8 million, flaring up around 37% year over year. Net loss widened to $18.7 million from the $10 million incurred during the corresponding period of 2019. Notably, the company reported its first earnings report in third-quarter 2020, since going public in early October 2020 through a merger with Tortoise Acquisition Corporation.

Hyliion missed the Zacks Consensus Estimate in the third quarter, the negative surprise being 300.00%. This is depicted in the graph below:

Hyliion Holdings Corp. Price and EPS Surprise

Hyliion Holdings Corp. Price and EPS Surprise

Hyliion Holdings Corp. price-eps-surprise | Hyliion Holdings Corp. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Hyliion’s fourth-quarter loss per share has remained unchanged over the past 90 days.

What the Zacks Model Says

Our proven Zacks model does not conclusively predict an earnings beat for Hyliion 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. However, that is not the case here as elaborated below.

Earnings ESP: Hyliion has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is at par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hyliion, peers of which include American Axle (AXL - Free Report) , Meritor (MTOR - Free Report) and Adient Plc (ADNT - Free Report) , currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let's delve deeper into the factors that are likely to have influenced Hyliion’s fourth-quarter performance.

Factors at Play

Hyliion makes hybrid as well as fully-electric powertrain solutions for Class 8 commercial vehicles. The company’s agreement with FEV North America to accelerate the commercialization of the Hypertruck ERX, which has a fully-electric drivetrain, as well as a natural gas-powered onboard generator to charge the battery, positions it well for growth. The use of state-of-the-art technology is likely to have positively impacted the company’s revenues in the quarter to be reported.

Hyliion’s biggest rewarding point is that it can retrofit its technology on the existing fleets, giving it an upper hand over rivals. This is likely to have further helped the company generate higher margins during the to-be-reported quarter.

Strategic combination with the Tortoise Acquisition in October generated proceeds of $520 million, making Hyliion well capitalized and primed for disrupting the powertrain market. The company is utilizing these resources to develop a scaled infrastructure that will be able to support the elevated demand from the powertrain market. This is likely to have boosted the company’s performance during the October-December period.

However, the company’s inflated research and development costs on advanced technologies might have dented the margins to some extent during the fourth quarter.

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