Breaking Down Workhorse Group Inc. (WKHS) Financial Health: Key Insights for Investors

You're looking at Workhorse Group Inc. (WKHS) right now and seeing a classic electric vehicle (EV) scaling challenge: low sales volume against a high cash burn, but with a critical near-term strategic lifeline. The reality is stark on the revenue side-the company reported only $2.4 million in sales for the third quarter of 2025, which came from selling just 15 trucks, a slight dip from the prior year. Still, the net loss for Q3 2025 dramatically improved to $7.8 million, a sharp cut from the $25.1 million loss a year ago, largely thanks to strategic financial maneuvers. The pivotal factor is the proposed merger with Motiv Electric Trucks, which not only promises scale but has already injected approximately $25 million in interim funding, boosting the cash and equivalents position to a more manageable $38.2 million as of September 30, 2025. This isn't a story of organic growth yet; it's a high-stakes financial restructuring that makes the next 90 days the most important in the company's history.

Revenue Analysis

You need to know if Workhorse Group Inc. (WKHS) is finally turning vehicle orders into consistent sales, and the 2025 numbers show a mixed picture: volatility is still high, but the trailing twelve months (TTM) revenue is up significantly, driven by the W56 truck. The core takeaway is that the revenue base is shifting almost entirely to electric vehicles, but one-time gains still mask weak quarter-to-quarter delivery consistency.

For the twelve months ending September 30, 2025, Workhorse Group Inc.'s TTM revenue was approximately $10.74 million. This represents a substantial year-over-year increase of roughly 62.4% compared to the full-year 2024 revenue of $6.61 million. That jump is a headline number, but the quarterly data tells a more nuanced story about the company's ability to scale production and deliveries.

Here's the quick math on the quarterly sales for 2025, which shows the real challenge in the near term:

• Q1 2025 Sales: $0.6 million (a miss, down from $1.3 million in Q1 2024).
• Q2 2025 Sales: $5.7 million (a record quarter, up sharply from $0.8 million in Q2 2024).
• Q3 2025 Sales: $2.4 million (a slight dip from $2.5 million in Q3 2024).

Breakdown of Primary Revenue Sources and Segments

The company's revenue streams are now almost exclusively tied to the sale of all-electric commercial vehicles. The primary products are the W56 Class 5/6 step van and the W4 CC/W750 Class 4 truck. The W56 is the core growth engine; its proven reliability, with reported 97% uptime in customer fleets, is a key selling point for fleet operators.

The contribution of different business segments has undergone a significant change in 2025, simplifying the model. Workhorse Group Inc. has been divesting its non-core assets, notably the 'Aero' business (drone systems), which contributed to the Q1 2025 revenue decline. The focus is now laser-sharp on the medium-duty electric truck market, which is a good strategic move. For a deeper dive into their long-term vision, you can check out the Mission Statement, Vision, & Core Values of Workhorse Group Inc. (WKHS).

Analysis of Significant Revenue Changes

The Q3 2025 revenue figure of $2.4 million is a great example of why you must look past the top line. While the company completed the sale of 15 trucks in the quarter, the sales number was effectively propped up by a significant one-time event.

The Q3 sales total included a $2.2 million increase related to the recognition of revenue from seven vehicles that were previously classified as deferred revenue, due to the termination of the Tropos Assembly Services Agreement. To be fair, without that deferred revenue recognition, the pure vehicle sales revenue would have been closer to $0.2 million for the quarter, reflecting lower truck deliveries compared to Q2's record of 32 trucks. This volatility is defintely a risk, showing that scaling is not yet a smooth, linear process. The table below illustrates the recent quarterly performance:

Profitability Metrics

The direct takeaway for Workhorse Group Inc. (WKHS) is that its profitability metrics remain deeply negative, reflecting the substantial costs of scaling an early-stage electric vehicle (EV) manufacturer. While the company is showing progress in cost control, its margins are nowhere near industry averages, making it a high-risk, high-reward turnaround play.

For the trailing twelve months (TTM) ended September 30, 2025, the company's core profitability ratios highlight the challenge of achieving scale. Here is the quick math on the TTM margins, which are a more stable view than a single quarter:

• Gross Margin: -236.75%
• Operating Margin: -558.74%
• Net Profit Margin: -606.69%

These negative figures mean that for every dollar of revenue, the company is losing multiple dollars, a common but unsustainable situation for a pre-scale manufacturer. The TTM revenue was approximately $10.62 million, with a corresponding net loss of $64.43 million.

Gross Profit and Operational Efficiency

The Gross Profit Margin (Gross Margin) is the first hurdle. In the third quarter of 2025, Workhorse Group Inc. reported sales of $2.4 million and a Cost of Sales of $10.1 million, resulting in a gross loss of $7.7 million. This quarter's gross margin of approximately -320.8% widened compared to the prior year, driven largely by a $3.3 million increase in inventory excess and obsolescence reserves. That's a huge drag on the top line.

Still, on the operational side, there is a clear focus on cost management. Comparing the first nine months of 2025 to 2024, the company reduced its total operating expenses (OpEx) by $17.5 million. This reduction, achieved through initiatives like inventory rationalization and lower headcount, is a necessary step to extend the cash runway. The company's management is defintely trying to get costs under control.

Net Profit and Industry Comparison

The Net Profit Margin (NPM) is the final measure of financial health, and Workhorse Group Inc.'s TTM NPM of -606.69% shows the depth of the challenge. This is where the comparison with the broader industry average is stark. The industry average for Net Profit Margin is around 3.58%, while the Gross Margin average is 16.61%. Workhorse Group Inc. is operating at a massive deficit relative to its peers, which is expected for a company in its phase, but it highlights the need for significant scaling to close that gap.

What this estimate hides is the impact of one-time events. The third quarter of 2025 actually saw a GAAP Earnings Per Share (EPS) beat, but this was heavily aided by non-recurring gains, including a $13.8 million gain from a sale-leaseback of its Union City facility and a $4.8 million deferred revenue gain. Without these one-off items, the net loss would have been substantially higher than the reported $7.8 million for the quarter.

For a deeper understanding of the company's long-term vision that underpins its current strategy, you can review the Mission Statement, Vision, & Core Values of Workhorse Group Inc. (WKHS).

Here is a snapshot of the TTM comparison:

The proposed merger with Motiv Electric Trucks, expected to close in Q4 2025, is a clear action aimed at improving these numbers by leveraging synergies and enhancing operational efficiencies to lower unit costs. This move is the most critical near-term opportunity to fundamentally change the profitability trajectory.

Next step: Portfolio Managers should model a path to a -50% Gross Margin by Q4 2026, incorporating the expected cost savings from the Motiv merger to assess a realistic timeline for gross profit breakeven.

Debt vs. Equity Structure

You need a clear picture of how Workhorse Group Inc. (WKHS) is funding its operations, and the balance sheet tells a story of high leverage and a strategic pivot toward equity-linked financing. The direct takeaway is that Workhorse Group Inc.'s reliance on debt is significant, with a recent Debt-to-Equity (D/E) ratio of nearly 2.0, which is high for the broader automotive sector but common in the capital-intensive electric vehicle (EV) space.

Here's the quick math: Workhorse Group Inc.'s trailing twelve-month (TTM) Debt-to-Equity ratio as of November 2025 stands at approximately 1.99. This means the company is using almost two dollars of debt for every one dollar of shareholder equity to finance its assets. Compare this to the broader Auto Manufacturers industry average, which typically sits around 0.92. That's a stark difference, but to be fair, early-stage EV manufacturing demands massive capital, so high leverage isn't always a fatal flaw here.

Current Debt Load and Industry Comparison

Workhorse Group Inc.'s total debt is a moving target due to its financing activities, but a recent TTM balance sheet view puts the total debt at roughly $54.06 million. More specifically, as of September 30, 2025, the estimated fair value of the outstanding senior secured notes (the 2024 Notes) was $27.1 million, plus a Convertible Note from Motiv Electric Trucks' controlling investor for $5.1 million. The company is definitely relying on debt to bridge its cash needs as it scales production.

• WKHS D/E Ratio (TTM Nov 2025): 1.99
• Auto Manufacturer Industry Average: ~0.92
• High-Leverage EV Peer Example: NIO's D/E was recently around 2.92

What this estimate hides is the nature of the debt. Most of it is in the form of convertible notes, which offer a path to converting debt into equity, thereby reducing the debt load but diluting existing shareholders. It's a trade-off: reduce bankruptcy risk now, but at the cost of future ownership percentage.

Recent Refinancing and Equity Strategy

The company's strategy to balance debt and equity has been aggressive in 2025, focusing on converting debt to stock and securing new, strategic financing. This helps to manage the immediate cash crunch and simplify the capital structure ahead of the proposed merger with Motiv Electric Trucks. Workhorse Group Inc. has no public credit rating, so it relies on private placements and convertible instruments for funding.

Key financing actions in 2025 include:

The conversion of $19.0 million in debt principal to common stock in the third quarter of 2025 is a clear example of using equity funding-diluting shares-to pay down debt and improve the near-term balance sheet. Also, the $20 million sale-leaseback of the Union City, Indiana facility, plus a $5 million secured convertible note, provided a critical $25 million liquidity injection from Motiv's investor. This is a defintely a high-stakes strategy, but it's what's keeping the lights on and funding the merger. If you want to dive deeper into the full financial picture, check out the full post on Breaking Down Workhorse Group Inc. (WKHS) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know how much runway Workhorse Group Inc. (WKHS) has, and the Q3 2025 numbers show a liquidity position that is heavily reliant on strategic financing, not core operations. The company's working capital is positive, but the quick ratio reveals a tight, immediate cash position, which is a classic early-stage EV manufacturing challenge.

Assessing Workhorse Group Inc.'s Liquidity Ratios

As of September 30, 2025, Workhorse Group Inc.'s liquidity ratios indicate a fragile, but technically solvent, position. The Current Ratio sits at approximately 1.21, calculated from total current assets of $72,961,801 against total current liabilities of $60,429,463. This means the company has $1.21 in current assets for every $1.00 in current liabilities. That looks okay, but it's defintely not a comfortable margin for a growth company still ramping up production.

The real signal is the Quick Ratio (or Acid-Test Ratio), which strips out inventory-often slow to convert to cash for an EV maker. This ratio is only around 0.25. Here's the quick math: with net inventory at $29,999,387, the remaining quick assets, including cash and accounts receivable, total just $15,338,223. A quick ratio below 1.0 is a red flag for short-term financial flexibility, showing that without selling inventory, the company cannot cover its immediate bills.

Working Capital and Cash Flow Trends

The company's working capital, the $12.5 million difference between current assets and current liabilities, is positive, but it has fluctuated throughout 2025. This positive balance is largely buoyed by a significant amount of restricted cash, totaling $25,475,596 in Q3 2025, which is earmarked for specific purposes and not available for general operations. This is crucial: a large portion of their liquidity isn't truly liquid for day-to-day needs.

Looking at the cash flow statement overview for the trailing twelve months (TTM) ended Q3 2025, the underlying operational reality is clear. The company is burning cash.

• Operating Cash Flow: Used $32.49 million (TTM). This is the core problem; the business model is not yet self-sustaining.
• Investing Cash Flow: Used $36,728 (TTM). Capital expenditure is low, suggesting a focus on conserving cash rather than aggressive expansion.
• Financing Cash Flow: This is the lifeline. Net cash provided by financing activities was a significant $34.12 million in Q1 2025 alone, primarily from debt and equity transactions.

The trend is a classic high-growth, pre-profit scenario: negative cash from operations is offset by positive cash from financing. That's fine for a short period, but it can't last forever without substantial revenue growth. You can see more about the capital structure in Exploring Workhorse Group Inc. (WKHS) Investor Profile: Who's Buying and Why?

Near-Term Liquidity Concerns and Strengths

The primary strength is the strategic action taken to shore up the balance sheet. The proposed merger with Motiv Electric Trucks is the single biggest near-term liquidity factor. Workhorse Group Inc. has already benefited from approximately $25 million in funding from Motiv's controlling investor, including a $20 million sale-leaseback of their Union City facility and a $5 million convertible note. Plus, the merger is conditional on securing up to $20 million in additional debt financing upon closing.

The main concern remains the operational cash burn and the low quick ratio. The company is relying on extraordinary financing events, like the sale-leaseback and convertible notes, to maintain its working capital. If the merger with Motiv were to face an unexpected hurdle, or if the $20 million in post-close financing falls through, the company's liquidity could tighten very rapidly, especially given the TTM operating cash outflow of over $32 million.

Valuation Analysis

You're looking at Workhorse Group Inc. (WKHS) and asking the core question: Is this stock a bargain, or is it a value trap? The short answer, based on the latest November 2025 data, is that the market views it as a highly speculative 'Hold' with a significant near-term risk profile.

Here's the quick math: Workhorse Group is currently trading at a deep discount to its book value, but that's because the company is still burning cash and not yet profitable. You need to look past the simple price multiples to understand the true picture.

• Stock price dropped -93.30% in the last 52 weeks.
• The consensus analyst rating is a Hold.
• The Price-to-Book ratio suggests a deep discount.

Is Workhorse Group Inc. (WKHS) Overvalued or Undervalued?

When a company is losing money, traditional valuation metrics like the Price-to-Earnings (P/E) ratio become meaningless, so we have to rely on other measures. For Workhorse Group, the P/E ratio is not applicable (n/a) because the company has negative trailing twelve-month (TTM) earnings, reflecting losses of -$64.43 million over the last 12 months.

However, the Price-to-Book (P/B) ratio, which compares the stock price to the company's net asset value, is a low 0.58 as of November 2025. This sub-1.0 P/B ratio suggests the stock is technically 'undervalued' against its assets, but you must remember that a low P/B often signals serious concerns about the company's ability to generate future profit from those assets, especially in a capital-intensive industry like electric vehicle (EV) manufacturing. The Enterprise Value-to-EBITDA (EV/EBITDA) is also negative, at -1.09, because the TTM EBITDA is negative, further confirming the company's current unprofitability.

What this estimate hides is the high volatility; the stock's beta (a measure of volatility relative to the market) is 2.33, meaning it's significantly more volatile than the S&P 500. That's a huge risk.

Stock Trend and Analyst Outlook

The stock price trend has been brutal. Workhorse Group Inc. has seen its stock price plummet by -93.30% over the last 52 weeks, with the price hovering around the $0.89 mark as of late November 2025. This reflects the market's reaction to continued losses and the challenges of scaling production in the competitive EV sector. The all-time low of $0.5300 was hit very recently, on November 16, 2025, which shows the intense selling pressure is defintely near-term.

The analyst consensus is a pragmatic 'Hold' rating, which means Wall Street expects the stock to perform in line with the broader market, not outperform it. The average price target is around $1.75, implying a potential upside from the current price, but this target has been frequently adjusted down as the company navigates its restructuring and merger with Motiv Electric Trucks. Honestly, the 'Hold' is a polite way of saying 'wait and see' until there is clear evidence of scalable revenue and positive operating cash flow.

Dividend Policy and Actionable Insight

As a growth-focused, pre-profit EV manufacturer, Workhorse Group Inc. does not pay a dividend. The dividend yield and payout ratio are both 0.00%. This is standard for a company in this phase, as all available capital must be reinvested to fund operations and R&D. They need every dollar of their $12.7 million in cash (as of Q3 2025) to survive.

If you are considering an investment, your clear action is to look for tangible progress on the Motiv merger and the W56 vehicle sales. Revenue for Q3 2025 was only $2.4 million, so they have a long road ahead. For a more detailed look at the company's financial stability, you can check out Breaking Down Workhorse Group Inc. (WKHS) Financial Health: Key Insights for Investors. Your next step should be to track Q4 2025 delivery numbers closely; that will be the real test.

Risk Factors

You need to understand that investing in a company like Workhorse Group Inc. (WKHS) right now means accepting a high degree of risk, especially given its position as a growth-stage manufacturer in a capital-intensive industry. The near-term outlook is defintely dominated by financial and strategic execution risks.

The core issue is liquidity and the ongoing inability to reach profitability. For the third quarter of 2025, the company reported a net loss of $7.83 million, despite a significant 68.9% improvement from the prior year's loss. Still, revenue was only $2.4 million, a slight decrease from the previous year. This gap between sales and costs highlights a persistent operational challenge.

Here's a quick look at the major risks impacting Workhorse Group Inc.:

• Financial Distress: The company's financial health is rated poorly. As of September 30, 2025, the current ratio was 0.87 and the quick ratio was just 0.42. This means they have less than a dollar in liquid assets for every dollar of short-term liability, a clear sign of liquidity strain.
• High Volatility: The stock's high beta of 4.2 and volatility of 122.73% indicate extreme sensitivity to market movements, meaning any negative news can cause a disproportionate price drop.
• Scaling Challenges: The cost of sales for Q3 2025 was $10.1 million, which included a substantial $3.3 million charge for inventory excess and obsolescence. This shows they are struggling to control manufacturing costs and manage inventory as they scale up production of vehicles like the W56.

The most critical near-term factor is the proposed strategic merger with Motiv Electric Trucks. This transaction is meant to strengthen their market presence and product lineup, but it carries a binary risk.

To be fair, the company has been very clear: if shareholders do not approve the Motiv merger, the company would be forced to pursue a standalone path, which management has warned would likely result in your investment having little or no value. The merger is a lifeline, not just a growth opportunity. You can review the strategic rationale behind the combined entity in their Mission Statement, Vision, & Core Values of Workhorse Group Inc. (WKHS).

On the external front, competition is fierce in the commercial Electric Vehicle (EV) market. Workhorse Group Inc. must compete with much larger, better-capitalized players. Also, the regulatory landscape is a double-edged sword: while incentives like the California HVIP vouchers help drive sales of their W56 trucks, any change or reduction in these government programs would immediately impact customer demand and the total cost of ownership (TCO) advantage of their vehicles.

The mitigation strategy is primarily focused on financial discipline and the merger.

The company is working hard to preserve cash, reducing year-to-date operating expenses by $17.5 million compared to 2024. But, the path to sustained profitability still hinges on achieving significant production volume to lower unit costs, and that's a big execution risk.

Growth Opportunities

You're looking for a clear path to growth for Workhorse Group Inc. (WKHS), and honestly, the near-term story hinges entirely on one major strategic move: the proposed merger with Motiv Electric Trucks. This isn't just a partnership; it's a required consolidation to achieve the scale and product diversity needed to compete in the medium-duty electric vehicle (EV) market.

The core growth drivers for the combined entity are clear, focusing on product innovation, market expansion via incentives, and operational scale. Workhorse Group Inc. is positioning its flagship W56 step van, which has demonstrated impressive field performance with over 97% uptime in customer fleets, as the anchor product. Plus, the recent integration of the Utilimaster Aeromaster body for the W56 chassis gives fleet operators a familiar, trusted form factor, which is a big deal for adoption.

• Product Innovations: The W56 platform offers an expanded lineup, including the extended wheelbase 208 W56, now fully certified in the US and Canada.
• Market Expansions: The W56 is eligible for crucial state-level incentives, most notably the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) vouchers, which can provide $85,000 per truck or higher for Class 6 vehicles. They are actively targeting similar programs in states like Washington and New York.
• Strategic Initiatives: The definitive merger agreement with Motiv Electric Trucks, announced in August 2025 and expected to close in the fourth quarter of 2025, is the game-changer. It creates a stronger North American medium-duty electric truck OEM with a wider product portfolio.

Future Revenue and Earnings Outlook

The financial projections for 2025 show the challenge of transitioning from a development-stage company to a scaled manufacturer. While Workhorse Group Inc. reported Q3 2025 sales of only $2.4 million, analysts are mapping out a significantly higher potential for the full fiscal year, assuming the merger and production ramp-up take hold.

Here's the quick math on analyst expectations for the 2025 fiscal year, which reflects a highly optimistic view of the sales pipeline converting to revenue, especially with the Motiv merger on the horizon:

What this estimate hides is the significant capital needed to reach that revenue target. The merger with Motiv is expected to inject up to $20 million in additional debt financing post-close, on top of the approximately $25 million in interim funding secured from Motiv's controlling investor, which is critical for near-term liquidity.

Competitive Edge and Actionable Insight

Workhorse Group Inc.'s competitive advantage isn't just the vehicle itself; it's the ability to deliver a dependable, purpose-built EV that qualifies for major government subsidies. The W56's eligibility for the $85,000+ HVIP voucher in California is a massive sales lever in a market where Total Cost of Ownership (TCO) is the primary concern for fleet managers. This is how you move the needle on purchase orders.

The merger with Motiv is the clear, actionable catalyst for investors to watch. It is designed to create a more efficient operation, reducing the high cost of sales-Q3 2025 cost of sales was $10.1 million against only $2.4 million in sales. This gap must close. For more on the players involved, you should be Exploring Workhorse Group Inc. (WKHS) Investor Profile: Who's Buying and Why?