VinFast Stock Rises Potential Setbacks in Business
US futures traded largely unchanged Thursday as investors prepare to close out a positive year on Wall Street. Some notable premarket stock movers, the overall market remains steady as the year comes to an end.
Microsoft (MSFT) stock rose 0.3% despite The New York Times suing the software giant, as well as OpenAI, accusing them of using millions of the newspaper’s articles without permission to help train chatbots. Apple (AAPL) stock also rose 0.3% after a US appeals court paused a government commission’s import ban on the sales of the tech giant’s flagship smartwatches following a patent dispute with Masimo (MASI). Sociedad Quimica y Minera de Chile (SQM) ADRs saw a 7% increase after the miner announced a partnership with Chile’s state-owned copper mining company Codelco for future lithium projects in the country.
Marathon Digital (MARA) stock fell 4.6% after the Bitcoin miner handed back the prior session’s sharp gains on optimism for a cryptocurrency ETF. Karuna Therapeutics (KRTX) stock also fell 0.1% after JPMorgan downgraded its stance on the biotech company to ‘neutral’ from ‘overweight’, citing its valuation. AIG (AIG) stock rose 0.4% after HSBC initiated coverage of the insurance giant with a ‘buy’ rating, calling it a “classic restructuring play.” Cingulate (CING) stock more than trebled after the biopharmaceutical company, which is developing a treatment for ADHD, disclosed that the delisting of its stock has been delayed until at least February. VinFast (VFS) stock rose 0.2% after the Vietnamese electric vehicle maker launched its first partnership with a US-based dealer in its latest effort to ramp up sales in the United States market.
Since the end of October, stocks have rallied tremendously, with the S&P 500 soaring 15% and the Russell 2000 jumping 21%. This huge rebound, brought about by greater confidence in the economy and less trepidation about interest rates, resulted in many drastically overvalued stocks.
VinFast (VFS) has a gigantic trailing price-sales ratio of 19.09 and a forward price-sales ratio of 15.5. The latter ratio is still very high, especially because analysts, on average, only expect the company’s per-share loss to drop to 86 cents in 2024 from 96 cents this year. There are at least two positive aspects of VinFast’s business. Specifically, analysts’ mean estimates call for its top line to surge to $3.14 billion in 2024 from $1.34 billion in 2023, and VinFast is expected to incorporate StoreDot’s fast-charging batteries into its EVs by 2025. In 2024, StoreDot, an Israel-based battery maker, expects to mass-produce EV batteries that will “deliver at least 100 miles of range in five minutes of charging.” But a great deal can go wrong for automakers, and if VinFast does not perform flawlessly, its overvalued shares will, in all likelihood, tumble.
As the year comes to a close, US futures remain largely unchanged with some notable premarket stock movers. The positive year on Wall Street, some stocks are still overvalued and may see a decline in the future.
