April 17 will be important

2024-04-15 05:47:14 ET

VinFast’s (NASDAQ: VFS ) stock price fell to a record low and this week will be more volatile when the company releases its financial results. It fell to a record low of $3.60 on Friday, a steep drop for a company that had been trading above $20 in 2023.

Quarterly earnings ahead

VinFast of

stocks have been in a steep decline

Over the past few weeks investors have focused on developments in the EV industry. He is not alone as other EV companies like Tesla, Mullen Automotive, and Fisker have all failed.

There are concerns about the demand for electric vehicles around the world. Fisker is on the verge of bankruptcy while Tesla is said to be preparing

dismissal of the main job

as its growth slows and the company prepares to post its earnings next week.

It is against this background that VinFast will publish its financial results this week. The most recent results showed that its revenue jumped 26% in Q4 to more than $437 million. It delivered over 13.5k electric cars and over 24k e-scooters in the quarter.

For that year, VinFast’s revenue reached more than 1.2 billion dollars. The company expects to deliver more than 100k vehicles this year. It also hopes to increase the number of models offered to cater to customers across economic brackets.

Analysts expect VinFast’s revenue for the quarter to come in at over $445 million. If this estimate is correct, revenue will be higher than the previous quarter’s estimate of $436 million.

The average of analysts polled by

Yahoo Finance

is that its revenue rose to $499 million followed by $570 million in the second quarter.

The main challenge for VinFast is that it will need to spend more money to service the more than 6,000 vehicles it recalled in March. It will also continue to burn money this year as its losses continue. The figures show that VinFast had a net loss of more than $2.3 billion in 2023 after shedding more than $2.1 billion in 2022.

VinFast will, therefore, raise additional capital as it becomes available

liquidity of 1.8 billion dollars

. These funds include approximately $164 million in cash. The remainder is made up of savings available in grants and the ELOC facility.

So, basically, it is likely that VinFast’s share price will continue to fall after it publishes its financial results. Besides, it is one of the most valuable companies in the industry with a market cap of $8.4 billion.

VinFast stock price forecast

VFS Chart by TradingView

The daily chart shows that the VFS stock price has been in a strong downward trend since 2023. Recently, the stock has fallen below the key support level of $4.61, its lowest change in October last year.

Shares of VinFast have moved below both moving averages while the Relative Strength Index (RSI) and Money Flow Index (MFI) have moved into oversold territory. Therefore, the path of minor resistance for the stock remains below, with the next target to watch at $3. A break below that level will increase the probability of a fall to $2.5. This view is consistent with my conclusion

VFS stock results forecast

.

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VinFast’s share price melts: April 17 will be important

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