It hasn’t been a fun ride for Workhorse (NASDAQ:WHKS) stock.

In fact, most start-up EV, low-quality special purpose acquisition companies (SPACs) and high-growth stocks have struggled over the past few months.

In the case of WKHS stock, shares remain 76% below the all-time high set in February. Unfortunately for Workhorse, earnings aren’t changing the narrative. 

On Monday Aug. 9, Workhorse reported its fiscal second-quarter results. Unfortunately though, the company is similar to other startups in that there isn’t much revenue. Further, it operates at a loss.

Essentially, Workhorse needs to hit higher rates of production and in what is a growing space of competition.

It does have one wild card, which is the United States Postal Service (USPS), but that wild card seems to be drifting further away by the day. 

Breaking Down WKHS

The company reported 31.4% year-over-year revenue growth, but with sales of just $1.2 million. Workhorse also reported a net loss of $43.6 million.

After delivering just one truck in the same period a year ago, Workhorse delivered 14 trucks in the most recent quarter.

While that is a big improvement, fundamental investors are going to have an issue buying a company valued at $1.3 billion with these types of financials.

Imagine their dismay when WKHS stock had a market capitalization of roughly $5 billion in February!

That said, bulls who are buying today aren’t doing so based on today’s fundamentals. 

Analysts expect about $75 million in revenue this year, which is exponentially larger than 2020’s revenue total of $1.39 million.

Granted, Workhorse wasn’t really “in business” last year, at least from a revenue perspective. Estimates for 2022 jump to about $245 million. 

While more palpable at 5.3 times 2022 revenue estimates, that’s not exactly cheap for an automaker. That said, a lot of hope hinges on the USPS.

During the company’s conference call, new CEO Rick Dauch said, “We’re not going to make any comments today about the USPS lawsuit.”

A few months ago in mid-June, shares of WKHS stock popped on news it had filed legal action against the USPS, which awarded its EV contract to Oshkosh (NYSE:OSK). The contract in question — worth up to $6 billion — was a major catalyst for Workhorse. 

It called for between “50,000 and 165,000 of a mix of internal combustion-powered and battery-electric vehicles,” with Workhorse proposing an all-electric fleet. 

There’s always a chance that contract comes back in play. For now though, I think we have to treat it as if it won’t — and that deals a tough blow to Workhorse. 

Bottom Line on WKHS Stock

Will Workhorse survive as a company? I don’t know — probably, but that doesn’t mean it’s a worthy investment. 

I see a company churning out just over a dozen vehicles and while I agree that we must all start somewhere, that doesn’t warrant a valuation in excess of $1 billion.

When Tesla (NASDAQ:TSLA) began hitting its stride, it was the only real EV player. It commanded a high valuation too, but it’s a different situation these days (almost a decade later). 

In fact, I find Tesla to be overvalued too, though, I would buy Tesla over WKHS stock because it has a much stronger operation. 

Workhorse has a plethora of competition. Not only are the traditional automakers like Ford (NYSE:F) and General Motors (NYSE:GM) involved in the EV game, plenty of other newcomers, startups and SPACs have entered the fray too. 

WKHS stock tried to rally on earnings, but failed to gain much upside traction. In fact, it couldn’t even reclaim its short-term moving averages.

Now it’s failing to hold $10.60, a key level, as it cracks below $10 and trades today around $9. 

From here, $8 may be on the table, followed by the 2021 low at $7.20.

I don’t have anything against Workhorse, it’s just doesn’t have the fundamentals or technicals working in its favor at this moment and that’s why I’m taking a pass and favoring something that does, like Tesla. 

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.