Is a Breakout in the Charts for QuantumScape (QS)?

QuantumScape Corp. (QS) is engaged in development of next generation solid-state lithium-metal batteries for use in electric vehicles. The company has well-known investors including Bill Gates and Volkswagen (VWAGY). The company’s solid-state lithium-metal batteries are expected to have significant advantages over current lithium batteries…

QuantumScape Corp. (QS) has developed a ceramic material that can be used as a solid-state separator in a battery cell. This can significantly reduce charging times and improve performance and fire safety. The firm recently announced that independent third-party tests verified the performance of its batteries.

As of the end of September, the company had $1.5 billion in cash, which compares favorably to only $66 million in long-term debt. Analyst forecast earnings to soar 95.4% year over year in the current quarter.

But the stock looks overvalued with a price-to-book of 9.6, which is well above the industry average of 1.9. QS, which was showing steady performance since early May, has been trending up over the past couple of weeks, as shown in the chart below. This has led to a Momentum Grade of B in our POWR Ratings system.

Take a look at the 1-year chart of QS below with the added notations…

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