EV (electric vehicle) charging and media company Volta (NYSE:VLTA) is streamlining its operations. The company announced a 10% reduction in the current workforce in this regard. Since June 1, Volta has reduced 18% of its full-time employees. Volta is struggling to remain afloat amid rising operating expenses and a liquidity crunch.
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Highlighting the liquidity issues, Needham analyst Vikram Bagri stated, “The biggest priority for management is increasing the company’s liquidity. VLTA ended 2Q22 with ~$105mm in cash. All else being equal, we estimate the company will run out of cash in late 4Q22 or early 1Q23. Management is optimistic that it can enhance liquidity, but now expects a capital raise to be dilutive.”
Other than reducing costs, Volta implemented additional cost-saving plans, including the tightening of business processes, consolidating teams, and controlling the marketing and administrative costs.
Citing an uncertain macro environment, Volta withdrew its full-year guidance. Also, it lowered its Q3 revenue guidance range to $13.5 million and $14.5 million, from $17 million to $18 million.
Given the challenges, Volta stock has slumped about 79% year-to-date. However, the company is confident that EV adoption and federal funding for EV infrastructure will support its growth. Its interim CEO, Vince Cubbage, said, “Despite near-term challenges, there is significant opportunity ahead in the EV charging market as adoption accelerates and federal funding for EV infrastructure is deployed.”
With a massive decline in its price and increased EV adoption, is VLTA stock a good buy?
Is Volta Inc Stock a Buy?
TipRanks’ data shows that analysts are cautiously optimistic about Volta stock. It has received two Buy and two Hold recommendations for a Moderate Buy consensus rating. Further, due to the plunge in its price, VLTA’s average price target of $4.13 implies 163.1% upside potential.
While analysts are cautiously optimistic, hedge funds sold 300K VLTA stock last quarter. Moreover, 2.5% of retail investors have reduced their exposure to VLTA stock in one month.
Volta stock has a Neutral Smart Score of four out of 10 on TipRanks.
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