Editing QuantumScape
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With an enterprise value above $6bn representing 1.4x EV/2028E revenue of $4.1bn, QS’ multiple is already almost in-line with the average of its well established li-ion battery peers such as Contemporary Amperex Technology (CATL) and LG Energy Solutions, and considerably above that of its pre-revenue startup battery peers. Deutsche Bank believes QS' stock performance from here will reflect perceived likelihood of success with its technology validation and ramp up, and therefore be heavily influenced by results of testing and ability to hit technical milestones. If QuantumScape successfully delivers on those, Deutsche Bank sees room for its valuation to reach the high-end of established li-ion battery peers due to its potentially superior technology, at 2x 2028 EV/sales which would suggest upside to $24. Conversely, if the company’s development plans start facing complications, delays or loss of momentum, Deutsche Bank sees large downside risk towards just 0.65x 2028 revenue, more in line with its startup battery peers, suggesting downside to $10. Deutsche Bank applies a 70%/30% likelihoods to these 2 scenarios to derive its $20 price target. | With an enterprise value above $6bn representing 1.4x EV/2028E revenue of $4.1bn, QS’ multiple is already almost in-line with the average of its well established li-ion battery peers such as Contemporary Amperex Technology (CATL) and LG Energy Solutions, and considerably above that of its pre-revenue startup battery peers. Deutsche Bank believes QS' stock performance from here will reflect perceived likelihood of success with its technology validation and ramp up, and therefore be heavily influenced by results of testing and ability to hit technical milestones. If QuantumScape successfully delivers on those, Deutsche Bank sees room for its valuation to reach the high-end of established li-ion battery peers due to its potentially superior technology, at 2x 2028 EV/sales which would suggest upside to $24. Conversely, if the company’s development plans start facing complications, delays or loss of momentum, Deutsche Bank sees large downside risk towards just 0.65x 2028 revenue, more in line with its startup battery peers, suggesting downside to $10. Deutsche Bank applies a 70%/30% likelihoods to these 2 scenarios to derive its $20 price target. | ||
== Opportunity to disrupt massive market == | === Opportunity to disrupt massive market === | ||
'''Inflection point for EV adoption across the automotive industry''' | '''Inflection point for EV adoption across the automotive industry''' |