VinFast Auto Ltd (NASDAQ:VFS)'s mixed third quarter earnings report marked a step in the right direction for the Vietnamese electric vehicle maker “with Mojo into 2025,” analysts at Wedbush believe.
They maintain their ‘Outperform’ rating and $8 price target on VinFast, which traded up 3.7% at $4 on Wednesday afternoon.
For Q3, VinFast’s revenue of $511.6 million missed Street estimates of $545.4 million as its loss per share of $0.23 was $0.05 better than the expected loss per share of $0.28.
EV deliveries of 21,192 were up 66% quarter-over-quarter while E-scooters were up 44% sequentially to 18,894, which analysts attributed to improved domestic reception.
“In response to elevated domestic demand for VinFast's affordable fleet, VinFast announced new plans for a CKD facility in Vietnam focused primarily on VF3 and VF5 models that will begin production in 2025 with a targeted 300,000 maximum production capacity as these models start delivering these models globally,” analysts wrote in a note to clients.
“The company also made further progress on its India and Indonesia CKD facility buildout while expanding its global showroom presence as VinFast looks to expand across both domestic and international markets.”
Increasing scale, ongoing bill of materials (BOM) and production cost optimization and improved operating efficiencies have already started to positively impact VinFast’s path to profitability, they added.
Wedbush sees VinFast in a solid position heading into 2025, with the company reiterating its fiscal 2024 guidance across the board.
They believe VinFast’s 80,000 vehicle delivery target is a “conservative bar to hit” as more consumers become familiar with its expanding lineup of affordable and luxury models, including the recently launched VF3 and VFS vehicles.
“We continue to believe the company is in the early innings of a multi-year growth story that is just beginning with facilities expected to open in 2025, an updated portfolio launched for its global customer base, and strict cost management initiatives in place to generate steady profitable growth over the coming years,” analysts concluded.