QuantumScape (QS) shares have fallen about 23% over the past month as investors grew concerned about its high valuation and possible near-term execution risks. Despite the recent drop, the stock remains up more than 130% year-to-date, driven by optimism around its solid-state battery technology, signs of manufacturing progress, and partnership potential.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Even so, some analysts argue the valuation remains stretched and that much of the future growth story is already reflected in the stock. In fact, Wall Street’s average price target for QS stock indicates downside risk from current levels.
QS’ Recent Performance
In Q3, QuantumScape reported a smaller-than-expected loss and stronger revenue. The company recorded its first-ever customer billings of $12.8 million and lowered its operating costs to $115 million. It also has about $1 billion in cash, giving it a nearly 26-month runway to continue development without immediate funding pressure.
However, the company is still far from making a profit. Also, legal headwinds, such as ongoing litigation in California, and manufacturing complexity, remain key concerns.
Wall Street’s Take on QuantumScape Stock
Following the Q3 print, TD Cowen analyst Gabriel Daoud kept a Hold rating but raised his price target on the stock to $16 from $5, pointing to better visibility on future commercial plans and a growing partner network.
Daoud highlighted a few key positives, including deeper engagement with a major global automaker and continued progress with Murata Manufacturing. He also noted that shipping the QSE-5 prototype cells in Q3 was an important milestone and a sign that QuantumScape is moving closer to scaling its Cobra manufacturing process.
In contrast, Evercore ISI analyst Chris McNally downgraded his rating to Hold from Buy, arguing that the stock now looks expensive based on current progress. He said QuantumScape’s technology is promising and still ahead of many competitors. However, he believes the stock price already assumes major deals with multiple automakers, which he sees as overly optimistic given the long development timelines and technical hurdles still ahead.
Nevertheless, he raised his price target to $12 from $8 because he sees potential in new markets like robotics, drones, and energy storage.
Is QS Stock a Buy, Hold, or Sell?
On TipRanks, QS stock has a Moderate Sell consensus rating based on five Holds and two Sell ratings. The average QuantumScape price target of $11.17 implies 7.53% downside potential from current levels.
