What happened
Hyliion Holdings (HYLN -1.85%) shares keep falling, and analysts at Goldman Sachs have kept a pessimistic tone even as they do. Shares of Hyliion dropped 13.8% after Goldman lowered its price target for the second time in six weeks.
So what
Hyliion is a start-up trying to help the commercial trucking industry go green, without requiring large truckers to mothball their entire fleets. The company is developing fully electric trucks and also has a hybrid system that can be retrofitted onto existing vehicles.
But the rollout has been more difficult than anticipated, and investors have begun to give up hope. Shares of Hyliion are down more than 97% from their late-2020 highs.
Goldman appears to believe the drop is justified. On Wednesday, analysts dropped their price target to Hyliion shares to $1.75 from $2.50. It is the bank's second such move since the beginning of March, both times keeping its sell rating on the stock.
Now what
Shares of Hyliion have lost more than half their value in 2023 alone. The company is still in the very early stage of commercialization, and even if it is successful will require patience and time from investors to get its act together.
That said, the logic behind the product remains solid. Regulators are pushing truckers to go green, and hybrid and retrofit solutions from Hyliion offer the potential to cut emissions quickly without the massive outlays required to buy thousands of electric trucks. The company is also hopeful that its offerings will qualify for credits under the Inflation Reduction Act.
For patient investors, there remains a place for Hyliion in a well-diversified portfolio. But given the results so far, it is hard to argue against the near-term pessimism, and even the most optimistic investor should buckle up and prepare for a long journey if Hyliion is to prove successful.
