Wedbush Raises Xos PT to $7, Maintains Outperform Rating

Wedbush Raises Xos PT to $7, Maintains Outperform Rating

Wedbush Securities has revised its price target for Xos (NASDAQ: XOS) to $7, while maintaining its "Outperform" rating. The upgrade reflects the investment firm's optimism about the company's strategic pivot and its ability to navigate the challenging electric vehicle (EV) sector.

In the second quarter of 2025, Xos reported a GAAP EPS of -$0.91, which beat estimates by $0.15, and revenue of $18.4 million, up 18.7% year-over-year, surpassing expectations by $5.29 million. The company also delivered 135 units, demonstrating its operational discipline and cost management efforts [1].

Despite the operational losses, Xos has shown resilience in managing its liquidity. It generated $4.6 million in free cash flow and maintained $8.8 million in cash and equivalents as of June 30, 2025. The company has also secured its largest 200+ unit order to date, diversifying its customer base across UPS, FedEx, and fleets [2].

Wedbush's positive outlook is driven by Xos's strategic pivot into powertrain systems and mobile charging hubs. These offerings address a critical gap in the EV ecosystem, providing integrated energy solutions to manage charging, grid services, and power resilience. The upcoming 2026 product update for the Xos Hub promises enhanced grid capabilities, which could unlock new revenue streams and differentiate the company from competitors focused solely on hardware [2].

However, the EV sector remains volatile, and Xos faces margin pressures and operational risks. The company's ability to execute its diversification strategy and navigate these challenges will be key to achieving sustainable growth. For risk-tolerant investors, Xos offers a compelling case, given its progress in reducing operating losses, managing liquidity, and expanding its product portfolio.

References:
[1] https://seekingalpha.com/news/4485022-xos-gaap-eps-of-0_91-beats-by-0_15-revenue-of-18_4m-beats-by-5_29m
[2] https://www.ainvest.com/news/xos-xos-navigating-margin-pressures-strategic-growth-high-volatility-ev-sector-2508/