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On Tuesday, Cantor Fitzgerald reaffirmed a Neutral rating on Polestar Automotive Holding UK Plc (NASDAQ:PSNY), following the company’s announcement on May 12 to pause its financial guidance for fiscal year 2025. The decision comes in light of deteriorating macroeconomic conditions and ongoing uncertainty regarding tariffs. According to InvestingPro data, the company’s financial health score is rated as WEAK, with a total debt burden of $5.1 billion and concerning cash burn rates. Analysts at Cantor Fitzgerald highlighted the company’s need for additional capital, anticipating that Polestar will require in excess of $2 billion through 2028.
Polestar’s operations are significantly affected by tariffs and geopolitical issues, primarily because its vehicles are largely manufactured in China. The company’s operational challenges are reflected in its financial performance, with revenue declining 14.1% and gross profit margins at -43.07% in the last twelve months. Despite these challenges, the company has confirmed its commitment to achieving an annual retail sales volume growth of 30-35% from 2025 to 2027. Polestar has a manufacturing facility in Charleston, South Carolina, which is expected to help lessen the impact of tariffs on sales in the United States. This facility, shared with Volvo (OTC:VLVLY), has a capacity for approximately 150,000 vehicles per year and is anticipated to produce up to 50,000 vehicles for Polestar.
The company also provided updates on its expansion plans, stating that its new production facility in South Korea is on schedule to commence operations in the second half of 2025. Additionally, the unveiling of the new Polestar 5 is expected to take place in the same timeframe, events that analysts consider to be significant catalysts for the company.
Despite these positive developments, Cantor Fitzgerald’s stance remains cautious due to recent executive team changes at Polestar, delays in financial reporting, and multiple financial restatements. This conservative outlook reflects the firm’s near-term expectations for the automotive company. For deeper insights into Polestar’s financial health and future prospects, InvestingPro subscribers can access comprehensive analysis, including 12 key ProTips and detailed financial metrics in the Pro Research Report, helping investors make more informed decisions in this volatile market.
In other recent news, Polestar reported its first-quarter revenue for 2025, which did not meet analyst expectations. The electric vehicle maker posted revenue of $608 million, falling short of the consensus estimate of $676.62 million, despite an 84.2% increase year-over-year. The company did, however, show a significant improvement in its gross margin, which rose to 6.8% from a negative 7.7% in the first quarter of 2024. Polestar managed to narrow its net loss to $190 million, a decrease of 31.2% from the previous year’s $276 million. Additionally, the company’s adjusted EBITDA loss improved by 45.7% to $115 million. Retail sales saw a substantial increase, climbing 76.5% year-over-year to 12,304 vehicles, thanks to the growing popularity of newer models. Polestar also secured over $900 million in financing facilities during the quarter. Despite ending the quarter with a slightly lower cash balance of $732 million compared to $784 million a year ago, the company remains committed to expanding globally, with plans to enter the French market this summer.
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