Workhorse Group's Price Target Lowered to $1.75 by Roth Capital

Roth Capital has lowered the price target on Workhorse Group to $1.75 from $2 and maintains a Neutral rating. The company's Q2 report showed progress with revenue ahead of delivery of 32 units and the Motiv Electric Trucks merger providing a wider path for ramping deliveries. However, Roth requires a credible timeline to positive gross margins before getting constructive on the shares.

Title: Workhorse Group Reports Q2 2025 Results; Roth Capital Lowers Price Target Amid Strategic Merger

Workhorse Group (NASDAQ: WKHS) reported its second-quarter 2025 financial results, highlighting significant revenue growth and strategic initiatives. The company achieved record deliveries of 32 trucks, including 36 purchase orders for W56 step vans, with sales reaching $5.7 million compared to $0.8 million in the same period last year. Despite the progress, Workhorse remains unprofitable, with cost of sales at $13.1 million, resulting in a negative gross margin of -130% [1].

The company reduced operating expenses by $7.0 million year-over-year, driven by a $6.3 million decrease in SG&A expenses and a $0.7 million decrease in R&D expenses. These cost-cutting measures have extended the company's financial runway, but the merger with Motiv Electric Trucks appears to be a necessity rather than an opportunity, given Workhorse's unsustainable financial trajectory despite aggressive cost-cutting [1].

Roth Capital Partners has lowered its price target on Workhorse Group to $1.75 from $2, maintaining a Neutral rating. The firm cited the company's Q2 report showing progress with revenue ahead of deliveries and the Motiv Electric Trucks merger providing a wider path for ramping deliveries. However, Roth requires a credible timeline to positive gross margins before getting constructive on the shares [2].

Workhorse Group's CEO Rick Dauch noted, "Our second quarter results reflect Workhorse’s continued efforts to advance our product roadmap, secure purchase orders and deliver exceptional vehicles for our customers." The company's CFO Bob Ginnan added, "The recently completed $20 million sale leaseback and $5 million secured convertible note transactions will simplify Workhorse’s capital structure and provide us with the near-term liquidity to support our operations through the close of the transaction" [1].

The company's strategic merger with Motiv Electric Trucks aims to create a leading North American medium-duty electric truck manufacturer. This transaction includes crucial financing: a $20 million sale-leaseback of Workhorse's Indiana facility and a $5 million secured convertible note. These funds will help address Workhorse's precarious cash position, which stood at just $2.2 million as of June 30, with $22.5 million in restricted cash [1].

Workhorse Group's financial results and strategic merger with Motiv Electric Trucks present a mixed picture for investors. While the company has shown operational improvement with increased deliveries and stronger customer interest for its W56 platform, the merger appears to be a necessity rather than an opportunity. Roth Capital's lower price target reflects these mixed signals and underscores the need for a clear path to profitability.

References:
[1] https://www.stocktitan.net/news/WKHS/workhorse-group-reports-second-quarter-2025-nsfzgah2jb1l.html
[2] Roth Capital Partners, "Workhorse Group Inc. (WKHS) - Lower Price Target to $1.75"