In 2015, Thomas Healy founded Hyliion as an ambitious project to bring forth hybrid and electronic vehicle technology to commercial fleets in hopes to accelerate innovation and reduce costs in its transportation and logistics concerns. In addition to his entrepreneurial spirit, Healy is also a mechanical engineer and sports racer. Now at 2022, looking into Hyliion Holdings Corp and its HYLN Stock value since its 2015 startup, does HYLN still have what it takes to be a solid, long-term investment?
More About Hyliion
Hyliion produces electrified powertrain systems that either augment or replace combustion-style automobiles that otherwise rely on diesel or petroleum-fueled powertrains. The system was designed to improve upon the performance of fuel-based automobiles, as well as lower the cost of its operations. Since then, the global need to achieve the goals Hyliion has laid out has become more urgent. As the growing demand by consumers is demanding corporations to take better social and environmental responsibility, this includes bringing forth sustainable commercial fleet management. More than ever before, brands are adopting initiatives with the demand their partners do the same. This has resulted in fleet owners and managers needing to reduce emissions and costs while maintaining performance to keep delivering goods and services that have always been a huge part of how the global market runs. Hyliion's vision is to make achieving these goals a reality today and not merely a decade down the road. The philosophy of innovation is what fuels Hyliion as it has products on the market and in final development that enables the company to deliver instant value to the customer and be a positive influence for the commercial transportation industry. Since 2015, Hyliion has been networking with investors, forming partnerships and strategic alliances as the foundation for net-carbon-negative emissions are laid out. Along the way, Hyliion has earned itself a number of awards and recognition from Cleantech University, Ethical Corporation, and Forbes, just to name a few. This, as a result, has won over a number of investors who have staked an interest in the development of Hyliion and its future as a company.
HYLN Stock Performance
According to the 2021 MSN, Hyliion was considered to be the dark horse in the world of electric vehicle (EV) manufacturing. Its identity as NYSE: HYLN saw an impressive debut in July 2021 when the stock rose by five times its startup amount, only to quickly crash back down to earth in a manner of a few short months. At the time MSN produced its article, HYLN had lost nearly two-thirds of its value since reaching its big high. Although it has been quite the bumpy ride, there is still reason to believe HYLN remains a good investment for long-term investors given how the EV market continues to evolve and where Hyliion sits in the equation.
What needs to be factored in was the approach Hyliion was taking compared to the rest of the competition that has been venturing so deeply into the EV industry. Hyliion has focused entirely on the niche market of Class Eight Trucks. The only competition it has is Tesla and Nikola. Another route Hyliion has taken that differs from the competition is the decision to favor electrified powertrains instead of aiming for a fully electric truck. This makes it easier to convert existing diesel trucks to become either hybrid or electric vehicles. Currently, a Hyliion truck will either run on natural gas or hydrogen that is passed through an onboard generator that will produce electricity in order to run it. The key advantage to this approach was the existing infrastructure for refueling natural gas that has over seven hundred fueling stations across North America. The benefit of the natural gas-based system is that is much faster and more convenient to refuel than electric. In order to charge a Class Eight Truck, it may take hours to fully recharge a truck while it sits idle. As quick as technology has seen improvements in EV units and the batteries designed to run them, the size of a Class Eight Truck is considerably larger and more demanding on the road. At the moment, the market is more focused on smaller EV units rather than larger ones. Because of this, Hyliion is in a league of its own, at least for now, and this is what makes HYLN as a long-term stock option seem worth it.
Hyliion Movement, 2020 Edition
With Hyliion targeting the performance and range of its operating system to be comparable to existing Class Eight Trucks, the company knows it needs to invest in a next-generation battery module. This is where Toshiba's lithium titanium oxide (LTO) cells come in, along with a battery-cooling technology that is forty percent more efficient. These are improvements designed to increase battery life, as well as charging rates, and the safety profile of Hyliion's EV units. The movement Hyliion has made in regards to the Class Eight Trucks suggests the company has a solid opportunity to become the dominant EV solution for the commercial fleet vehicle industry. Unlike passenger vehicles, the economics involved with commercial vehicles such as the Class Eight Trucks are not the same. Performance and reliability are the primary factors when making the decision to invest in a commercial performant vehicle. There is also a weight penalty to consider for full battery trucks as they need to be large enough to handle the big truck's needs. This means the batteries are likely to be larger and heavier, which then compromises the truck's cargo loading abilities.
In 2020, this seemed to be a struggle for Tesla, at least as far as its engineering department was concerned. Already, there are models from Hyliion that come close to the performance level of currently operating diesel trucks. CEO Thomas Healy pointed out Hyliion's focus has been to utilize small battery packs that are constantly recharged while the vehicle is in operation, which serves as a better alternative than a large battery pack that requires a full day's worth of recharge. This strategic approach has been seen in the characteristics of the Hypertruck ERX as the battery size is considerably smaller than conventional EV truck batteries. The Q4 2020 results saw a rather uneventful year as Hyliion only installed twenty hybrid electric units throughout the year. Because the company was still in pre-revenue, the decision not to book revenue early from its orders was made. So, at the end of 2020, HYLN saw a net loss of over $39 million USD.
Hyliion Movement, 2021 Edition and Beyond
To make a long story short, the expectations Hyliion Holdings had for 2021 met with some bitter disappointment when the first nine months of the year failed to bring in any revenue. Because of this, investors began to punish the HYLN stock. this caused the shares to drop by 62.4 percent, at least according to the data issued by S&P Global Market Intelligence. However, Hyliion wasn't alone in this disappointment as its competitor, Nikola, also saw its shares drop by over thirty-five percent in 2021. However, Nikola began to deliver completed commercial trucks to customers before the year was over. Hyliion has yet to do this. Because of this, it doesn't look like the Hyliion shares are about to rebound in the near future. For the moment, the market has been shifting away from growth companies that only have projected future prospects instead of actually bringing forth a tangible product. With the investors expecting a steady increase in federal funds rate in 2022, the future potential earnings are beginning to look less valuable. It doesn't help when Hyliion has told the investors to push back expectations, which explains the company's recent stock performance. The company has also admitted the competition has impacted its prospects as the global supply chain disruption continues to leave a trail of shortages of needed components in order to complete projects. Hyliion has been one of the many high-tech companies that have been directly affected by the shortage of computerized technology in order to move forward with its production.
In the meantime, Tesla, the company that seemed to trail behind Hyliion in 2020 has since brought forth fifteen electric semi-trucks to PepsiCo and has Class Eight Trucks hitting the market this year, which now causes the interest in Hyliion's hybrid trucks to wane. As 2022 progresses, Hyliion needs to race to put its lineup on the road before the year is over. Investors will need to watch how customers react to what Nikola and Tesla have produced so far and how Hyliion will respond to it. In regards to investment strategies, Hyliion should have been something that had the long-term goal in mind from the very beginning.
According to the Nasdaq article that was issued in late 2021, although Hyliion Holdings Corp's HYLN Stock took quite a beating in 2021, a round of new options slated for the February 2022 expiration sees options coming available that may see HYLN make a comeback that may prove to be its weight in gold for long-term investors who are paying attention. At the Stock Options Channel, the YieldBoost formula has observed the HYLN options chain and sees a call contract that was of particular interest. The put contract at the $6.50 price has a current bid of thirty-eight cents. If an investor was to sell-to-open that put contract, they're committing to purchase back the stock at $6.50, plus the premium. As a long-term investment option, HYLN still shows promise. However, this is going with the assumption that the option will be exercised when the February 2022 deadline rolls around. According to the analytical data, there is a near one hundred percent chance the current trading price of the HYLN stock will see the put contract expire, which then makes the contract worthless. With the New York Stock Exchange (NYSE), anything can happen, but should the contract expire as worthless, the premium would represent a 5.85 percent return on the cash commitment, or an annualized 49.62 percent. According to Stock Options Channel, this is called the YieldBoost.
Is HYLN Stock Solid?
2021 was a disappointing year for HYLN, but 2022 shows promise as Hyliion still has room to work with by the time the February 2022 deadline arrives. Like so many other companies, Hyliion faced supply shortages due to issues revolving around the COVID-19 pandemic that saw supply and demand on virtually every manufactured product there are encounter distribution issues. While Nokia and Tesla may be the first two EV manufacturers to put their commercial EV vehicles on the road, sometimes being the first to do something isn't always the point. It boils down to whoever does everything right the first time that beats out the competition, even if there were a few setbacks that messed with the schedule. Hyliion still shows promise and the management team has not lost hope, nor focus, to show the world they're down for the count yet. According to Zacks, HYLN stock looks ripe for a turnaround after experiencing the wild ride of overtrading between itchy investors and selling pressures. Currently, HYLN is well-positioned for a trend reversal that will likely see better earnings than what was predicted earlier. This is not 2021 anymore.
When stock becomes oversold, like Hyliion's HYLN has, the momentum oscillator will have a Relative Strength Index (RSI) reading that plunges below thirty point mark. When this happens, investors start looking for entry opportunities into the stock so they can benefit from the inevitable rebound. However, investing in NYSE is still a gamble and even the RSI readings have their limitations and should not be solely used to make an investment decision. In regards to HYLN Stock's anticipated turnaround, the shares are in the process of exhausting themselves. At the moment, its RSI reading sits at 29.11. At least according to the timing of this article's write-up. This means the trend for this stock could soon see the reversal, perhaps by the time the February 2022 deadline hits. This falls on the equilibrium of stock and demand as industries that experienced severe supply shortages are now on the rebound themselves. Does this mean HYLN Stock is a solid long-term investment? According to Zacks, the answer seems to be a yes, at least for now.
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Written by Allen Lee
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