Volcon, Inc. (VLCN) in Round Rock, Tex., made its stock market debut on Oct.6, 2021. The company designs, produces, and distributes electric off-road powersports vehicles and accessories in the United States. It sells electric two- and four-wheel motorcycles and utility terrain vehicles through its website and dealers.

However, the stock has declined 76.1% in price year-to-date and 81.1% over the past three months to close yesterday's trading session at $2.58.

While the company manufactures all-electric, zero-emission off-road vehicles intended to enhance the outdoor experience, it is up against stiff competition with both new entrants and established competitors vying for market share.

Click here to checkout our Electric Vehicle Industry Report for 2022

Here is what could influence VLCN's performance in the upcoming months:

Business Headwinds

The semiconductor bottleneck, which is wreaking havoc across the automotive industry, is unlikely to be resolved by 2022, according to AMD CEO, Dr. Lisa SU. In addition, because of chip supply difficulties, Ford Motor (F) plans to suspend or reduce output at eight of its facilities in the United States, Mexico, and Canada. So, as companies in this space struggle with current supply chain constraints, the near-term prospects of VLCN look uncertain.

Mixed Financials

VLCN's revenue came in at $75,007 for the third quarter, ended Sept.30, 2021. Its cash was $2.66 million, representing a 395.7% increase for the nine months ended Sept. 30, 2021.

However, its operating expenses grew 1457.3% from the prior-year quarter to $4.74 million. Its operating loss rose 1819% from its year-ago value to $5.84 million. In addition, the company's net loss grew 1834.1% year-over-year to $5.89 million, while its loss per share came in at $2.55.

POWR Ratings Reflect Uncertainty

VLCN has an overall C rating, which equates to a Neutral in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. VLCN has a D grade for Stability, which exhibits lower stock volatility than its peers. In addition, it has a C grade for Quality, which is consistent with the company's mixed financials.

Of the 69 stocks in the F-rated Auto & Vehicle Manufacturers industry, VLCN is ranked #39.

Beyond what I have stated above, you can view VLCN ratings for Growth, Value, Momentum, and Sentiment here.

Bottom Line

The stock surged nearly 97% in price on its market debut. However, it has plunged significantly over the past few months. In addition, the stock is currently trading below its 50-day and 200-day moving average of $7.47 and $4.50, respectively, exhibiting bearish sentiment. Furthermore, its mixed financials, persistent supply chain bottlenecks, and rising industry-wide competition threaten its near-term price performance. So, we believe investors should wait before scooping up its shares.

How Does Volcon, Inc. (VLCN) Stack Up Against its Peers?

While VLCN has an overall C rating, one might want to consider its industry peers, Isuzu Motors Limited (ISUZY), which has an overall A (Strong Buy) rating and Daimler AG (DDAIF), and Hino Motors Ltd. (HINOY), which has an overall B (Buy) rating.

Click here to checkout our Electric Vehicle Industry Report for 2022

VLCN shares fell $0.05 (-1.94%) in premarket trading Wednesday. Year-to-date, VLCN has declined -76.11%, versus a -6.08% rise in the benchmark S&P 500 index during the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

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