VinFast Auto Ltd (NASDAQ:VFS) achieved 74% year-on-year growth in its third-quarter deliveries and appears to be on track to almost double its deliveries in 2025, according to Chardan Research.
The VinFast Auto Analyst: Analyst James McIlree reiterated a Buy rating and price target of $5.50.
The VinFast Auto Thesis: With around 95% of VinFast Auto's total deliveries being made to its domestic market, Vietnam, the company is likely to hit total deliveries of 185,000 this year, McIlwee said in the note.
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The average selling price (ASP) rose from $16,700 in the second quarter to $17,400 in the third quarter, the analyst stated.
Although around half of deliveries in Vietnam are of the lowest-priced products, sales of the Herio Green, which has a much higher price, may have pulled up the ASP, he added.
While VinFast Auto reported gross margins of -56.2%, stripping out the impact of delayed revenue recognition and changes in NRV, gross margin would have been -17.1% in the third quarter, an improvement from -20.8% in the previous period, McIlwee said.
"This is a critical issue for the company as improvements in gross margin, reported and adjusted, will be a key driver of investor sentiment and confidence in the company's ability to reach cash flow breakeven," he further wrote.
VFS Price Action: Shares of VinFast Auto had declined by 1.73% to $3.17 at the time of publication on Monday.
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