Why It’s Time to Pump the Breaks on Polestar Stock

Electric vehicle manufacturer Polestar Automotive (NASDAQ:PSNY) might amaze you with its sleek high-performance automobiles. However, PSNY stock certainly hasn’t been a winner for long-term investors.

Until this trend reverses, and until Polestar Automotive becomes a profitable business, it’s going to be difficult to assign a higher grade than a “D” to the stock.

The fact is, there are plenty of publicly listed EV manufacturers in 2023. Discerning investors should ask themselves: Why should I invest in Polestar Automotive, in particular?

In the final analysis, there’s no compelling reason to hit the “buy” button today, though it’s fine to keep Polestar Automotive on your watch list.

Polestar Offers Stunning Vehicles (and a Boat)

First things first. In a surprising move, Polestar Automotive teamed up with Candela to introduce the Candela C-8 Polestar edition, an electric hydrofoil boat.

There’s no price listed in the press release, so you can bet that it will not be a cheap boat. Like Polestar Automotive’s cars, the Candela C-8 Polestar edition is fast, feature-rich and visually appealing. Whether this electric boat model will be a strong seller is another matter entirely. Time will tell, as they say.

The point is, there’s no denying the outstanding quality of Polestar Automotive’s products. For example, the Polestar 4 SUV coupe looks great, and the vehicle’s “0-100 km/h sprint can be completed in just 3.8 seconds.”

Meanwhile, the 2024 Polestar 2 Long Range Single Motor reportedly starts at a reasonable price of $51,300. If you prefer the dual-motor version, its starting price is $56,700, which isn’t exorbitant for a high-performance EV nowadays.

PSNY Stock Has a Lot of Catching Up to Do

Polestar Automotive’s vehicles are impressive, but this apparently hasn’t translated to value for the shareholders. Unfortunately, PSNY stock has falled from $13 a year ago to around $4 recently.

So, the stock and its long-term investors have to play a game of catch-up. It’s a tough game to win when there’s so much competition in the EV space. Plus, some folks might wonder whether Polestar Automotive is having financial problems.

Notably, the company implemented a “global hiring freeze and 10% headcount reduction.”

Polestar Automotive has room to improve, so really the company is a “show-me” story. While Polestar Automotive only delivered 12,076 cars in 2023’s first quarter, at least up 26% on a year-over-year basis.

Polestar Automotive is a small startup that could grow, but future growth isn’t guaranteed in a crowded field. Additionally, it posted another net earnings loss in Q1 2023.

However, that net loss is shrinking when compared to the net loss from the year-earlier quarter. Hopefully, Polestar will turn profitable in the near future.

Watch and Wait With PSNY Stock

Polestar Automotive is small but ambitious, and has unique electric cars (and now, a boat as well). The company may show continued financial and operational improvement in the coming quarters.

Careful investors can adopt a watch-and-wait policy with Polestar Automotive for now. Feel free to keep PSNY stock on your watch list, as it has earned a “D” rating and there’s no hurry to take any action on it.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.