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High Operational Costs to Hurt QuantumScape (QS) in Q2 Earnings

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QuantumScape Corporation (QS - Free Report) is slated to release second-quarter 2022 results on Jul 27, after the closing bell. The Zacks Consensus Estimate is pegged at a loss of 19 cents per share for the quarter. The estimate for loss per share has remained unchanged over the past 60 days. In the last reported quarter, this solid-state battery maker reported a net loss per share of 21 cents, wider than the consensus estimate of 17 cents.

Key Factors Likely to Shape Quarterly Results

QuantumScape’s next-generation cutting-edge batteries are revolutionizing the EV space. Leveraging lithium-metal technology, QS’ batteries charge up a vehicle to 80% of its full capacity in around 15 minutes. The company aims to achieve ranges of 300 miles or more, hyper-fast charging (less than 15 minutes), cheap vehicles (less than $30k), and extended battery life (more than 150,000 miles), thus accelerating the race to mass EV adoption. The use of this game-changing technology is likely to have positively impacted the company’s second-quarter performance. Partnerships with companies like Volkswagen and Fluence Energy are expected to boost results.

Nonetheless, high capex and R&D expenses remain a headwind for this pre-revenue company. During its last quarterly release, the company notified that it would spend $35-$65 million in capex to fund factory expansion and tooling. The firm’s high operating expenses, including SG&A and R&D costs, are also likely to have clipped margins. Overall, with the company being in its nascent stage and not likely to generate revenues until 2024, it is expected to report a dismal quarterly show owing to escalating operating costs and capex.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for QuantumScape for the to-be-reported quarter as it does not have the right combination of the two key ingredients. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: QuantumScape has an Earnings ESP of 0.00%.

Zacks Rank: It carries a Zacks Rank of 3 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are a few stocks lined up to release quarterly results soon. Encouragingly, our model predicts an earnings beat for these stocks:

Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +8.67% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Jul 28.

The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $2.2 billion, respectively. Over the trailing four quarters, OSK surpassed earnings estimates twice for as many misses, with the average negative surprise being 1.21%.

Magna International (MGA - Free Report) has an Earnings ESP of +5.82% and a Zacks Rank #3. The company is slated to release second-quarter results on Jul 29.

The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $8.77 billion, respectively. Over the trailing four quarters, MGA surpassed earnings estimates twice for as many misses, with the average being 12.6%.

Lear Corporation (LEA - Free Report) has an Earnings ESP of +6.93% and a Zacks Rank #3. The company is set to post second-quarter results on Aug 2.

The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $4.75 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.