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Escalating Costs to Hurt Hyliion (HYLN) This Earnings Season

Hyliion Holdings HYLN is scheduled to release fourth-quarter 2021 results on Feb 24, after the bell. The Zacks Consensus Estimate is pegged at a loss of 27 cents per share for the quarter. The consensus mark for Hyliion’s fourth-quarter loss per share has been unchanged in the past 90 days. The projection implies a sharp deterioration from the year-ago loss of 6 cents a share.

In the last reported quarter, this Texas-based electric vehicle (EV) startup incurred a net loss per share of 15 cents, narrower than the consensus mark of a loss of 24 cents. Hyliion surpassed the Zacks Consensus Estimate in the trailing four quarters, with the average being 39%. This is depicted in the graph below:

Hyliion Holdings Corp. Price and EPS Surprise

Hyliion Holdings Corp. price-eps-surprise | Hyliion Holdings Corp. Quote

Factors Shaping Q4 Results

Inflated research and development costs on advanced technologies are likely to have hurt Hyliion’s fourth-quarter bottom line. In the last reported quarter, Hyliion spent $18.1 million in R&D activities, reflecting a sequential and yearly surge of 35.4% and 525%, respectively. SG&A expenses flared up 305% year over year to $8.66 million in third-quarter 2021. The trend is expected to have continued in the to-be-reported quarter.

For the first three quarters of 2021, Hyliion’s operating expenses totaled $67 million. The company forecasts operational costs of $50 million for the fourth quarter. Such elevated spending levels, at a time when Hyliion is still in the nascent stage and not generating any meaningful revenues, are likely to have played a major spoiler.

On a further discouraging note, the shortage of semiconductors and other key components has been causing delays in the deliveries of Hyliion’s Hypertruck ERX system and Hybrid eX solution, as notified by the firm in the last earnings call. Although HYLN anticipates beginning recognizing revenues on Hybrid eX deliveries in the to-be-reported quarter, chip-related headwinds and longer-than-expected delivery times are likely to negatively impact the company’s fourth-quarter results.

What the Zacks Model Says

Our proven Zacks model does not conclusively predict an earnings beat for Hyliion this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

Earnings ESP: Hyliion has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hyliion currently carries a Zacks Rank of 4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

What to Expect From Peers

Nikola Corporation NKLA: Our proven model does not conclusively predict an earnings beat for Nikola this time around. The EV company has an Earnings ESP of 0.00% and a Zacks Rank #3. The company is set to report fourth-quarter 2021 earnings on Feb 24.

The Zacks Consensus Estimate for Nikola’s to-be-reported quarter’s loss is pegged at 29 cents per share. NKLA surpassed earnings estimates in the last four quarters, with an average of 29%.

Lucid Group LCID: Our proprietary model does not conclusively predict an earnings beat for Lucid this time around. Lucid, which went public in July 2021, has an Earnings ESP of 0.00% and a Zacks Rank #4. The company is set to report fourth-quarter 2021 earnings on Feb 28.

The Zacks Consensus Estimate for Lucid’s to-be-reported quarter’s loss is pegged at 26 cents per share. In the last reported quarter, LCID incurred a loss of 41 cents, wider than the Zacks Consensus Estimate of 22 cents per share.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Nikola Corporation (NKLA): Free Stock Analysis Report
 
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