MW QuantumScape's stock is still on a tear, but buyer beware, analyst says

By James Rogers

Baird's Ben Kallo said he needs to see how QuantumScape plans to make money on its breakthrough EV-battery-making technology before he gets bullish on the stock

Shares of QuantumScape Corp., a maker of electric-vehicle batteries, continued their recent rocket ride higher Thursday, sparked by the announcement of a new manufacturing process for a key battery component.

While the company's new Cobra manufacturing process for lithium-metal batteries has been heralded as an important milestone for the company, Baird Equity Research sees a number of risks for investors, including the fact that the company has not yet recorded its first sale.

Set against this backdrop, the stock $(QS)$ soared 32.2% toward an 11-month high in afternoon trading, to put it on track for its biggest one-day gain since it ran up 43.1% on Jan. 4, 2024.

It has rocketed 76.9% amid a three-day winning streak, which would be the stock's best three-day stretch since it rose 94.9% over the three days ending Dec. 22, 2020.

In a statement, the San Jose, Calif.-based company said that its Cobra separator manufacturing process has entered "baseline production." QuantumSpace is touting the Cobra technology as a significant improvement to the manufacturing process for ceramic separators used in solid-state batteries. Ceramic separators are difficult to manufacture, according to Barron's.

QuantumScape expects to have the first customer launch of its technology next year.

The company says that Cobra will boost its ability to scale production of solid-state batteries as compared with its prior Raptor technology. Cobra offers a 25-fold improvement in heat-treatment speed compared with Raptor, QuantumScape said.

In a note, Baird Equity Research said that it is encouraged by QuantumScape's milestones to date, as well the company's liquidity forecast. QuantumScape ended the first quarter with $860.3 million in liquidity and maintained its guidance that its cash runway extends into the second half of 2028.

Car giant Volkswagen (XE:VOW) has close ties with QuantumScape and has a 15% stake in the company, according to FactSet data. Last year Volkswagen's battery company, PowerCo, entered into an agreement with QuantumScape to industrialize its solid-state batteries.

Despite these positives, Baird analyst Ben Kallo writes that "significant milestones are still ahead" for QuantumScape. "We seek additional details on the go-to-market strategy before becoming more constructive," he added.

The analyst cited a number of risks for QuantumScape, including that the company is still pre-revenue and Baird's assumption of a slower production ramp, which could also prove difficult. Kallo also pointed to a competitive market from multiple parties and described the Volkswagen nonexclusivity deal as both "positive and negative."

Kallo has a $6 price target for the stock, which implies 20% downside from current levels.

He's not the only analyst who has reservations on the stock.

Of the seven analysts surveyed by FactSet who cover QuantumScape's stock, one is bullish, four are neutral and two are bearish.

The average price target of the analysts surveyed is $4.83, which is about 36% below current levels.

QuantumScape shares have climbed 44.4% in 2025, outpacing the S&P 500 index's SPX gain of 4.3%.

-James Rogers

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 26, 2025 15:41 ET (19:41 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.