It’s no secret that the Electric Vehicle industry is booming right now. Tesla and Nio stockholders have both enjoyed the hype. And for a bit it seemed like Hyliion stock (NYSE:HYLN) was the next ship that everyone missed. But after a huge price fall everyone has the same question, following this giant dip, should you buy Hyliion stock?
On September 29th, Hyliion stock closed at $53.51.
On October 2nd Hyliion stock closed at $9.68.
Nothing short of an astronomical drop.
Aside from the bag holders hoping HYLN stock can bounce back, other investors are wondering if this may be the time you should buy Hyliion stock.
Before Hyliion stocks initial boom in June, HYLN had been steadily trading at around $10 a share for about 6 months. So what makes them so special? Where did the hype come from?
What Makes Hyliion Unique
To put it simply, Hyliion Holdings owns the patent and technology for the most efficient option for electric hybrid trucks to be on the road.
“Given the limits around the electrifying long-haul trucking, Hyliion bypasses the current powertrain truck options to introduce a realistic emissions-reducing solution that bridges the adoption gap between diesel and fuel cell/battery electric trucks, Johnson said in a research note, according to TheFly.com.
He forecasts “healthy growth” through the end of the decade for the company.” – Source
So the MOAT is there. They have an angle and business model.
But What Is Hyliion Stock Really Worth?
When looking into whether you should buy Hyliion stock during the current dip it’s important to keep the target price of HYLN in mind.
With a stock that has fluctuated so drastically in the past 3 months alone most would expect to be advised to stay away.
However recent Barclays coverage has instilled a lot of new confidence in Hyliion stock.
“The Barclays coverage also has the firm setting HYRL stock up with a price target of $20 per share. That’s actually below the consensus price target for $23 per share for the stock. However, it still implies a roughly 27% upside for the stock compared to its closing price on Tuesday, reports SeekingAlpha.” – Source
Others point to the Biden administration. Implying his new “green initiatives” will increase stock value for all EV companies.
“The new rating for HYLN stock comes as more investors take an interest in electric vehicle (EV) companies. That interest was started by Joe Biden’s strong performance in the presidential election. Biden’s platform is green-energy friendly, which is behind the increasing interest in EV stocks.” – Source
Should You Buy Hyliion Stock?
While it is highly unlikely to expect HYLN stock to get back up to $50+ anytime soon, the fact that it has a consensus price target of $23 a share makes $16 look like a solid entry point.
Hyliion Holdings is a young company. They will have growing pains.
They have a plan, and on top of that, they have capital.
“At least the bulls can say that Hyliion is well capitalized. As of Sept. 30, the company held $7,565,000 in cash and cash equivalents (unaudited). This capital position should stand Hyliion in good stead as the company works towards its upcoming product milestones.” – Source
While there is a lot of upside, it’s risky. New investors should enter cautiously.
If you bought in too early and already have stock, hold.
They have capital, an inspiring CEO, and are emerging in an extremely popular industry on the stock market.
If you are a current stock holder, hold. Any investor who rode HYLN stock down this far may as well stay, the rebound may be as low as $13, but after that Hyliion stock should only go up from there.