When VinFast Auto (NASDAQ:VFS) released its first-quarter financial update this week, investors received a mixed report. While the Vietnamese electric vehicle (EV) manufacturer reiterated its expectation to produce 100,000 EVs this year, its first-quarter vehicle production and revenue fell short of expectations.
As a result, analysts at investment banking firm BTIG revised their stock price target for VinFast from $8 to $5 per share. Despite the adjustment, the new target still reflects a potential gain of 98% from the stock’s current price of $2.52 over the next 12 months. BTIG analyst Gregory Lewis and his team maintain their recommendation to buy VinFast stock.
Since its initial public offering through a special purpose acquisition company (SPAC) merger in August 2023, VinFast stock has experienced significant fluctuations. After reaching highs of over $80 per share, the reality of being an early-stage EV maker has led to a decline in share price to the low single digits.
In the first quarter, VinFast reported revenue of approximately $300 million, lower than the expected $400 million, and a higher-than-expected loss. However, the company is pursuing expansion plans worldwide to achieve its 100,000-vehicle production target for 2024. This includes establishing 16 new dealerships in the U.S. and constructing a manufacturing facility in North Carolina. VinFast aims to boost brand awareness by importing vehicles ahead of the North Carolina plant’s completion.
Despite current challenges, analysts believe that the expansion of VinFast’s dealership network and increased production capacity will contribute to a rebound in the company’s stock. However, investors are advised to approach with caution due to the uncertainties and significant capital expenditure associated with the stock’s current stage of development.
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Author Faith Yakubu 
