Uncertain Times Ahead for VinFast Auto
VinFast, the Vietnamese electric-vehicle start-up, recently reported fourth-quarter sales and earnings that fell short of expectations. Despite this, the company’s guidance for the future provides some hope for investors.
Sales and Earnings Results
In a recent announcement, VinFast disclosed a gross loss of $155 million from sales totaling $465 million. This result was below Wall Street’s forecasted loss of $141 million from sales of $528 million. With only four analysts covering the company, comparing these figures to expectations proves to be a challenge.
Future Targets and Projections
Looking ahead, VinFast aims to deliver 100,000 vehicles in 2024, a significant increase from the 34,763 units delivered in 2023. This promising guidance has caught the attention of analysts, with estimates suggesting around 85,000 deliveries. Analysts currently rate VinFast stock as a Buy, with price targets ranging around $10.50.
Market Performance
As of Wednesday’s close, VinFast stock was at $5.26, marking a 37% decline this year amidst a challenging landscape for EV-related stocks. The industry-wide concerns regarding slowing demand growth have also impacted other players like Tesla, whose shares dropped by approximately 22% during the same period.
Industry Challenges and Responses
Fellow EV manufacturers Lucid and Rivian recently revealed production forecasts that fell below street expectations. Lucid anticipates producing 9,000 units in 2023, versus analyst projections of 12,000 units. Similarly, Rivian’s estimate of 57,000 units was shy of the anticipated 66,000 units.
Market Expectations and Insights
With a history of volatile movements following earnings reports, options markets suggest a potential 10% swing in VinFast stock moving forward. The company experienced a 5.5% drop after the announcement of its third-quarter results, indicating an uncertain path ahead.
In conclusion, while VinFast faces challenges in the current market environment, its ambitious targets and relatively positive guidance may provide some stability in an otherwise fluctuating sector.
