Why investors held back Gogoro shares this week

What happened

After rising more than 11% from the start of September to the end of last week, shares of gogoro (GGR -9.59%) seem to be running out of charge. Tuesday, a JP Morgan the analyst initiated coverage of the battery swap solution provider with a bearish view, and investors are taking notice.

As of 11:33 a.m. ET Friday, shares of Gogoro were down 14.4% from the end of last Friday’s trading session, according to data from S&P Global Market Intelligence.

So what

In his initial rating on Gogoro, JPMorgan’s Bill Lin gave it an underweight rating and set a price target of $4.30 for the stock. Based on Monday’s closing price of $5.26, this price target implies a decline of 18.3%.

Why is Lin so austere about Gogoro’s prospects? According to TheFly.com, Lin based his stance on declining electric scooter sales in Taiwan, the company’s main market. Additionally, Lin described Gogoro’s progress in overseas markets as “disappointing” and added that macroeconomic uncertainty in China was another important reason for caution regarding the stock.

Lin’s bearish comment wasn’t the first hint that investors realized the future for this company could be rocky. In a recent investor presentation, Gogoro management downgraded its 2022 revenue forecast. year, it now expects to generate revenues of $380 million to $410 million.

Now what

While it’s common for a stock to fall after an analyst casts a bearish view on it, it’s important to remember that these Wall Street tipsters often base their outlook on investment horizons that are shorter than the time periods. multi-year holding periods that the Motley Fool favors. Therefore, investors considering this growth stock should dig deeper into the company’s progress in expanding into global markets and take a closer look at its financials. These areas deserve more attention than the short-term opinion of an analyst.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Scott Levine has no position in the stocks mentioned. The Motley Fool recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

About Arla Lacy

Check Also

Canadian company plans to expand employment at Binghamton plant

PHOTO CREDIT: CMP BINGHAMTON — Thanks to an infusion of cash from investors, …