Should You Exit This NYSE-Listed Industrials Stock – HYLN

Feb 18, 2022 12:00 AM PST | Team Kalkine
Should You Exit This NYSE-Listed Industrials Stock – HYLN

Hyliion Holdings Corp

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.

Why Should Investors Exit?

  • Lackluster Financials: HYLN's core business operations have yet to generate revenue. The company's loss from operations grew to USD 26.81 million in Q3FY21 from USD 5.05 million in Q3FY20 due to increased research and development (R&D) and selling, general and administrative (SG&A) expenses. It reported an increase in net losses to USD 26.62 million during Q3FY21 vs. USD 9.10 million during Q3FY20.
  • Supplier Concentration Risk: HYLN's electric powertrain solutions are based on complex and sophisticated software and hardware either developed in-house or maintained by third parties. These software and hardware could include defects, problems, or vulnerabilities that, if not addressed immediately, could harm the company's reputation, result in loss of customers, and have a negative influence on its profitability.
  • Technical Weakness: HYLN shares are hovering in a long-term bearish zone. At the last closing its shares traded below its crucial long-term as well as short-term support level of 200-day and 50-day SMAs, implies a long-term bearish trend in the stock. Further the leading momentum indicator 14-day RSI hovering in a neutral with bearish bias at ~42.

Stock Recommendation:

HYLN's share price has decreased 57.69% in the past nine months and is currently leaning towards the lower band of the 52-week range of USD 3.67 to USD 20.04.

Considering the company's weak financials, no visibility into top and bottom-line, supplier concentration risk and technical weakness. we recommend a "Sell" rating on the stock at the current price of USD 4.13, down 2.13% as of February 17, 2022, at 12:53 PM ET.     

Three-Year Technical Price Chart (as of February 17, 2022, at 12:53 PM ET). Analysis by Kalkine Group

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.