VinFast (NASDAQ: VFS) stock price crashed to a record low and this week will be more volatile as the company publishes its financial results. It plunged to a record low of $3.60 on Friday, a significant collapse for a company that was trading above $20 in 2023.
Quarterly earnings aheadVinFast’s shares have been in a strong freefall in the past few weeks as investors focused on the happenings in the EV industry. It is not alone as other EV companies like Tesla, Mullen Automotive, and Fisker have all plunged.
There are concerns about the demand for electric vehicles around the world. Fisker has almost gone bankrupt while Tesla is said to be preparing for major layoffs as its growth slows and as the company prepares to publish its earnings next week.
It is against this backdrop that VinFast will publish its financial results this week. The most recent results showed that its revenue jumped by 26% in Q4 to over $437 million. It delivered over 13.5k electric vehicles and more than 24k e-scooters in the quarter
For the year, VinFast’s revenues came in at over $1.2 billion. The company anticipates that it will deliver over 100k vehicles this year. It also hopes that it will increase the number of models on offer to cater for customers in all economic brackets.
Analysts expect that VinFast’s revenues for the quarter came in at over $445 million. If this estimate is correct, the revenue will be higher than the previous quarter’s estimate of $436 million.
The average by analysts polled by Yahoo Finance is that its revenue rose to $499 million followed by $570 million in the second quarter.
A key challenge for VinFast is that it will need to spend more money servicing over 6,000 cars it recalled in March. It will also continue burning cash this year as its losses continue. Data shows that VinFast had a net loss of over $2.3 billion in 2023 after shedding over $2.1 billion in 2022.
VinFast will, therefore, likely raise additional capital since it has available liquidity of $1.8 billion. These funds include about $164 million in cash. The rest is made up of available reserves in grants and the ELOC facility.
Therefore, fundamentally, there is a likelihood that the VinFast share price will continue falling after publishing its financial results. Besides, it is one of the most overvalued companies in the industry with a market cap of $8.4 billion.
VinFast stock price forecast
The daily chart shows that the VFS share price has been in a strong downward trend since 2023. Most recently, the stock has crashed below the crucial support level at $4.61, its lowest swing in October last year.
VinFast’s stock has moved below all moving averages while the Relative Strength Index (RSI) and the Money Flow Index (MFI) have moved to the oversold level. Therefore, the path of the least resistance for the stock is still downwards, with the next target to watch being at $3. A break below that level will increase the possibility of it falling to $2.5. This view is in line with my last VFS stock forecast.
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