Why Lightning eMotors Stock Is Slumping Today

What happened

Shares of Lightning eMotors (NYSE:ZEV), a maker of powertrains for electric commercial vehicles, were trading lower on Tuesday after the company reported a second-quarter loss that was wider than Wall Street had expected and withdrew its prior guidance for the full year.

As of 10:45 a.m. EDT, Lightning eMotors’ stock was down about 12.2% from Monday’s closing price. 

So what

Lightning eMotors reported its second-quarter results after the U.S. markets closed on Monday, and it lost more than analysts had expected. The company’s net loss was $46.1 million in Q2, or $0.79 per share, on revenue of $5.9 million. Wall Street analysts polled by Thomson Reuters had expected a loss of $0.14 per share on revenue of $5.37 million. 

CEO Tim Reeser said that the company’s second-quarter production was constrained by supply chain challenges. Lightning eMotors installs its powertrains in commercial-vehicle chassis made by companies including Ford Motor Company and General Motors. Both Ford and GM had to cut production repeatedly in the quarter amid a global shortage of semiconductors. If Lightning’s customers can’t get chassis, Lightning can’t install powertrains. 

Why is the stock down today? It’s probably more about the uncertain outlook than the earnings miss, but both are factors. 

Now what

Lightning also withdrew its prior guidance for the full year, citing the ongoing uncertainties around the chip shortage and the resurgence of COVID-19 infections. The company did say that electric vehicle investors should expect its revenue and production in the third quarter to be similar to the second, and noted that so far, none of its orders have been canceled.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/08/17/why-lightning-emotors-stock-is-slumping-today/

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