Hyliion Holdings Corp.

HYLN Details

Hyliion Holdings Corp. (NYSE: HYLN) is a designer, developer, and marketer of electrified powertrain systems for Class 8 commercial trucks to decrease carbon intensity and greenhouse gas (GHG) emissions. Its innovative software algorithms and data analytics capabilities enable fleets to save fuel and operational costs while seamlessly integrating with their existing fleet operations. The company is in the pre-commercialization stage of development, with its electric hybrid system in testing and the Hypertruck ERX system in the prototype phase.

Latest News:

• Marketing Roadshow of Hypertruck ERX: On November 05, 2021, HYLN announced that The nationwide Hypertruck ERX Marketing Roadshow, which will include meetings with numerous Hypertruck Innovation Council members, has begun. The roadshow aims to give Hyliion a chance to show off the Hypertruck ERX pre-production demo unit, its next-generation electric powertrain that is recharged by an onboard natural gas generator, allowing for long-range hauling and quick refueling while potentially allowing fleets to achieve net-negative carbon emissions.

Q3FY21 Results:

• Expansion in Loss from Operations: HYLN's core business operations have yet to generate revenue. Due to an increase in research and development (R&D) and selling, general and administrative (SG&A) expenses, the company's loss from operations increased to USD 26.81 million in Q3FY21 from USD 5.05 million in Q3FY20.
• Surge in Net Loss: HYLN reported an increase in net losses to USD 26.62 million during Q3FY21 vs. USD 9.10 million during Q3FY20.

• Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents (including short-term investments) of USD 433.95 million and no outstanding debt.

Key Risks:

• Supplier Concentration Risk: HYLN's electric powertrain solutions rely on sophisticated and complicated software and hardware created in-house or maintained by third parties. These software and hardware may contain defects, problems, or vulnerabilities that, if not identified quickly, could damage the company's reputation, result in loss of customers, and have a negative influence on its profitability.

Outlook:

• Revenue Guidance: As of Q3FY21, HYLN expects to begin deliveries of its Hybrid eX in Q4FY21.
• Operating Expense Guidance: It also anticipates its operational expenditures of R&D and SG&A expenses to range between USD 110 - 120 million for FY21, which is reduced from previous guidance in the range of USD 130 million to USD 140 million.

Stock Recommendation:

HYLN's share price has declined 51.64% in the past six months and is currently leaning towards the lower-band of its 52-week range of USD 3.67 to USD 22.25.

Considering the significant correction in the stock price, debt-free balance sheet, initiating promotional activities for Hypertruck ERX, anticipated revenue generation in Q4FY21, and associated risks, we recommend a "Speculative Buy" rating on the stock at the closing price of USD 4.56, up 2.47% as of February 01, 2022.

Three-Year Technical Price Chart (as on February 01, 2022). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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