Fisker Stock Popped on Friday. Looked at 1 Way, This Stock Has a P/E of Less Than 1.

Three straight days of share price declines came to an end for Fisker (NYSE: FSR) on Friday. Investors cheered news that the electric car start-up will attend next week’s National Automobile Dealers Association (NADA) Show in Las Vegas — and livestream an interview announcing its plans to set up a car dealer network — setting up Fisker stock for an 4.5% run higher (through 2 p.m. ET).

With Fisker stock selling for less than $0.80 a share — down from a pandemic-era high of more than $28 per share — investors may be wondering…

Is Fisker stock a buy?

I’ll answer this right up front: No. I do not believe Fisker stock is a buy. With less than $1.2 billion in cash on the books, and a cash burn rate of more than $800 million per year, simple math suggests that Fisker will run out of cash within the next two years, and probably go bust. I would therefore not buy Fisker stock.

However…

A Hail Mary hope for Fisker

That being said, I could be wrong about this, and looked at from one — particularly hopeful — perspective, there actually is an argument to be made that Fisker is a great buy right now, if only it can find a way to stay alive a few more years.

Rummaging through analyst forecasts for Fisker’s financial future, you see, I noticed that in 2027 — the year analysts polled by S&P Global Market Intelligence believe that Fisker will finally become profitable — the forecast is for Fisker to earn a per-share profit of $0.93.

Which, you’ll notice, is more profit per share than Fisker stock currently costs.

The fact is, if you’re really, really optimistic about this stock — which currently isn’t earning any profit, and probably won’t earn any profit for the next three years — Wall Street is at least holding out the remote prospect of Fisker earning so much money four years from now that the stock sells for a valuation of less than 1x fiscal 2027 earnings. That’s a very long-dated “forward P/E ratio” of less than 1.

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Granted, as investment theses go, this…