Why Hyliion Holdings Stock Is Sinking Today
Key Points
Hyliion reported third-quarter results on Tuesday after market close.
The company cut its full-year revenue guidance, saying that it now doesn't expect to recognize product-related revenue until 2026.
It's aiming to bring its multifuel electric generator to market next year.
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Shares of power-generation start-up Hyliion Holdings (NYSEMKT: HYLN) were trading sharply lower on Wednesday after the company cut its guidance for full-year revenue. As of 11:30 a.m. ET today, Hyliion's shares were down about 13.5% from Tuesday's closing price.
Hyliion's product will go to market soon, but not until 2026
Originally founded to build hybrid-electric systems for heavy trucks, Hyliion is now working to bring a multifuel electric generator to market.
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The generator, called Karno, uses what is called a "flameless oxidation" system. Hyliion says the device can generate electricity from a wide range of fuels -- natural gas, hydrogen, various petroleum derivatives, and even ammonia -- with minimal emissions.
Hyliion's Karno system can generate electricity from several different kinds of fuel, with minimal emissions. Image source: Hyliion Holdings.
During its earnings presentation on Tuesday, management said that its first Karno power module has met key benchmarks in testing with initial customers and is on track for a wider market launch in 2026.
Hyliion generated about $760,000 in revenue in the third quarter, all of it from an ongoing contract with the U.S. Navy, which is using Karno modules to power an autonomous naval vessel currently under development.
A cut to full-year guidance might have investors worried
For the full year, the company now expects revenue of about $4 million, all from the Navy contract. That's down from last quarter's guidance, which projected full-year revenue between $5 million and $10 million. The change is likely why the stock is down today.
Hyliion now expects to begin recognizing Karno-related revenue sometime next year. It said that it had $164.7 million in cash at quarter-end, enough to fund operations through the commercial launch of Karno.
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John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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