QuantumScape, trading under the ticker symbol NYSE: QS, released its second-quarter report on July 24. The company, known for its development of solid-state batteries, did not report any significant revenue due to the non-commercialization of its products. The net loss for the quarter widened from $117 million to $123 million, or $0.25 per share, missing analysts’ estimates by two cents.
On an adjusted EBITDA basis, the loss increased from $64 million to $73 million. QuantumScape reiterated its full-year guidance for an adjusted EBITDA loss of $250 million to $300 million. The company’s stock plummeted after the report, now trading at 95% below its all-time high in December 2020. Despite this, there is speculation on whether the stock could rebound in the next 12 months as progress is made towards commercializing its batteries.
QuantumScape specializes in solid-state batteries that utilize solid electrolytes instead of liquid ones found in lithium-ion batteries. These batteries offer faster charging times, higher capacities, increased temperature resistance, and longer lifespans. While solid-state batteries are already in use for smaller devices, QuantumScape aims to establish itself as a leader in the market for mobile devices and electric vehicles.
The company has set ambitious goals, claiming its latest batteries can provide EVs with a range of 400 to 500 miles with charging times under 15 minutes. Partnering with Volkswagen for over a decade, QuantumScape has been working towards commercializing its batteries.
Despite initial projections of revenue generation in 2024, QuantumScape has faced delays and revised its forecasts. The company anticipates no significant revenue this year, only shipping low-volume prototype samples to automakers. In 2025, higher-volume sample shipments are planned, with expectations of around $5 million in revenue. By 2026, revenue forecasts increase to $58 million. However, the stock remains expensive, trading at about 70 times its 2026 sales.
Competition in the solid-state battery market poses a challenge to QuantumScape, with other startups and automakers working on similar technologies. An agreement with Volkswagen’s PowerCo subsidiary may provide some support, extending the company’s cash runway.
Market projections suggest growth in the solid-state battery market, providing potential for QuantumScape if it can successfully commercialize its products. The company’s stock may remain stable in the short term, with potential for growth in the first half of 2025 as revenue generation begins. While QuantumScape is considered a speculative investment, recent agreements indicate the possibility of significant gains in the next 12 months.