VinFast's Weaker Q2 Results Raise Investor Concerns on Growth

VinFast Auto's recent report reveals a disappointing Q2 with wider losses and lower sales, leading to investor doubts about the company's aggressive delivery estimates. As its stock faces volatility, the outlook for future performance appears uncertain.

Date: 23-09-2024

AI Rating: 4

VinFast Auto Ltd. (NASDAQ: VFS) has reported disappointing financial results for the second quarter, raising concerns for investors. The company's losses came in at $0.33 per share, which was worse than Wall Street's expectations of a $0.21 loss. Additionally, sales of $357 million fell short of estimates that were set at $419 million, illustrating significant revenue shortfall.

The quarter’s year-over-year comparison shows a widening of losses, as the previous year’s loss was $0.24 per share, and sales were higher at $328 million—a concerning decline in financial performance. Although VinFast did experience a 9.1% increase in sales year-over-year, the context of unmet investor expectations dampens this growth.

Investors are particularly worried about the company's delivery estimates for the remainder of the year. VinFast's management projects a total of 80,000 deliveries for 2024, which requires an aggressive ramp-up in production and sales, especially after only achieving roughly 22,000 deliveries in the first half of the year. While a 43% year-over-year growth in Q2 deliveries and a 101% increase for the first half of 2024 may seem promising, around 12,000 of these sales were attributed to related parties, casting doubts on the sustainability of these numbers.

In terms of future growth, VinFast is actively expanding its operations within the U.S. and plans to introduce new models in 2025, which shows potential for market penetration. However, without reliable delivery numbers that meet expectations, the stock may continue to face downward pressure. The ongoing investor skepticism regarding the company’s ability to meet its delivery goals is a key factor influencing stock price movements.

Stocks: VFS