Shares of VinFast Auto (NASDAQ: VFS), the Vietnamese automobile maker that went public in a merger with a particular objective acquisition firm (SPAC) final summer time, tumbled 11.5% via 11 a.m. ET Wednesday after reporting massive misses on each gross sales and earnings for its first fiscal quarter of 2024.
Heading into earnings, analysts have been already pessimistic, predicting the corporate would lose $0.22 per share on gross sales of $450 million. Because it turned out, analysts weren’t pessimistic sufficient. VinFast misplaced $0.26 per share, and its gross sales have been solely $302.6 million.
VinFast Q1 gross sales and earnings (make that “losses”)
The information wasn’t all dangerous (solely largely dangerous). Whole first-quarter gross sales grew 270% 12 months over 12 months, with income from automobile gross sales up 324%. Gross revenue margins improved from destructive 173% to “solely” destructive 50%. Nonetheless, the corporate continued to lose cash at an alarming fee.
And it might be shedding momentum as effectively. Deliveries of electrical automobiles, whereas up 444% 12 months over 12 months, declined 28% sequentially from the fourth quarter of 2023. Deliveries of electrical scooters — previously VinFast’s fundamental enterprise — declined each 12 months over 12 months (down 32%) and sequentially (down 73%).
Is VinFast inventory a promote in 2024?
VinFast is making an attempt to show across the gross sales decline, practically tripling the variety of U.S. dealerships (to 16) with which it has relationships and signing up sellers in Indonesia, Thailand, and Oman.
It has additionally returned to its roots with a brand new electrical bike that it is making an attempt to promote within the U.S. for $2,599, concurrently it awaits the beginning of gross sales of its VF 9 EV later this month. And it guarantees to promote 100,000 EVs worldwide this 12 months.
VinFast may not stay to see the tip of this 12 months, nonetheless. Detrimental free money circulation within the first quarter alone was a staggering $717.3 million, and by its personal admission, the corporate solely has $123.3 million left within the financial institution. On the fee it is burning money, VinFast might be out of cash — and out of luck — in a matter of weeks, not months.
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Why VinFast Auto Inventory Crashed In the present day was initially revealed by The Motley Idiot
