Workhorse Group, Inc. (NASDAQ:WKHS), a technology company specializing in electric vehicles and drone technology for last-mile delivery, is currently experiencing significant volatility in its stock price. On Wednesday, the stock traded close to three times its 50-day moving average of $1.07.
This comes despite a year-to-date plunge of over 62% in its stock price. In contrast, the broader Russell 3000 Index, which includes Workhorse, has seen a 6% gain year-to-date.
Several factors have contributed to the fluctuations in Workhorse Group’s stock price throughout the year.
Also Read: Workhorse Misses On FY24 Revenue And EPS, But Cost Cuts Narrow Losses
Financial Performance and Market Position
Workhorse generates revenue through the manufacturing and sale of all-electric commercial delivery trucks, including Class 4 and 5/6 models like the W56.
However, the company has faced significant financial challenges, missing topline estimates in its previous two quarters and the bottom-line estimate in the last quarter.
For instance, in its first-quarter 2025 earnings reported on May 15, Workhorse announced sales of $640,920, a considerable drop from $1.34 million a year prior and well below the analyst consensus estimate of $2.35 million.
Despite these revenue shortfalls, the company did manage to narrow its quarterly gross loss to $4.52 million, an improvement from $6.10 million a year ago.
Workhorse CEO Rick Dauch stated that, as of early 2025, the company secured purchase orders for 27 W56 step vans (available in 178- and 208-inch wheelbases) and six W4 CC/W750 trucks.
Looking ahead, Workhorse aims to sell more trucks in the second quarter of 2025 than in all of 2024, while simultaneously focusing on cash conservation and extending its financial runway, which includes plans to downsize its workforce to reduce monthly cash burn.
Workhorse competes in the electric vehicle market with rivals such as Rivian Automotive (NASDAQ:RIVN) and XPeng (NYSE:XPEV).
Nasdaq Compliance and Reverse Stock Split
A significant event for Workhorse in the first half of 2025 was its struggle to maintain compliance with Nasdaq listing rules, which require a minimum $1 closing bid price.
To address this, the company implemented a 1-for-12.5 reverse stock split on March 17. This strategic move successfully boosted its share price, allowing Workhorse to regain compliance with Nasdaq listing rules on April 2, after maintaining a minimum $1 closing bid price for 10 consecutive trading days.
Macroeconomic Environment and EV Incentives
The broader macroeconomic landscape and changes in electric vehicle incentives also play a role in Workhorse’s outlook. The recent approval by the U.S. House of Representatives of President Donald Trump’s “Big Beautiful Bill” eliminates the $7,500 tax credit for new U.S.-made EVs.
With this tax break scheduled to expire on September 30, some automakers have already begun raising electric vehicle prices. This policy change could potentially prompt Workhorse to increase its own prices to protect its profit margins, thereby impacting customer demand.
Price Action: WKHS stock is trading higher by 15.5% to $3.13 at last check Wednesday.
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