Shares of QuantumScape (NYSE: QS) were sliding today after the solid-state battery company posted another loss in its second quarter and demonstrated relatively modest progress in its goal of becoming a viable company and scaling production of quantum batteries, which are more efficient than lithium-ion electric batteries.
QuantumScape has no revenue as the company is a development-stage technology company that's still building its product, but investors want to see it managing its cash burn and making progress toward a viable product.
As of 10:49 a.m. ET, the stock was down 8.3% on the update.
QuantumScape is still asking for patience
QuantumScape reported a generally accepted accounting principles (GAAP) loss of $134.5 million, a modest increase from $123.5 million in the quarter a year ago. On the bottom line, its loss per share of $0.25 was slightly worse than estimates at $0.22 per share.
Earlier this month, the company announced a new agreement with PowerCo, Volkswagen's battery division, which increased its cash runway to 2028, 18 months further than its earlier guidance. The deal creates a shared team of experts to collaborate on the new technology, and it also establishes a non-exclusive licensing agreement in which QuantumScape will receive $130 million in royalties when it reaches certain technical targets.
What's next for QuantumScape
Quantumscape also reported progress on its production of battery cells, saying it was on track to complete the Raptor process ramp-up. Raptor is the first stage of its fast separator production process.
The partnership with Volkswagen is a clear positive, but investors are understandably growing impatient. The company has $938 million in liquidity and expects an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $250 million to $300 million for 2024.
It's still likely to be years before QuantumScape brings in meaningful revenue.
Should you invest $1,000 in QuantumScape right now?
Before you buy stock in QuantumScape, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and QuantumScape wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $700,076!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of July 22, 2024
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Volkswagen Ag. The Motley Fool has a disclosure policy.
Why QuantumScape Stock Was Stalling Today was originally published by The Motley Fool