Cantor Fitzgerald reiterates Polestar stock Underweight rating By Investing.com

Polestar reported fiscal 2025 revenue of about $3.06B, up 50% year over year and slightly above consensus, but profitability remained very weak with a full-year gross margin of -35.4% versus -14.3% expected and a net loss of $2.36B. Q4 2025 revenue rose 54% to $887M and adjusted gross margin improved to 2%, but the company still posted a Q4 net loss of roughly $799M. Cantor Fitzgerald reiterated an Underweight rating on PSNY, reinforcing a cautious outlook despite top-line growth.

Analysis

PSNY reads less like a “miss” and more like a liquidity bridge story with deteriorating unit economics. The core issue is that volume is no longer enough to re-rate the equity when each incremental car is still being sold through a margin structure that destroys cash; that means the market will keep valuing the name on financing durability, not delivery growth. In EVs, the first non-obvious signal is usually not revenue, but whether gross margin inflects before debt/refi pressure becomes self-reinforcing.

The second-order loser is the broader premium-aspirational EV cohort: any OEM leaning on price cuts, carbon-credit support, or fleet/channel stuffing is now at greater risk of multiple compression because investors will assume Polestar is the template for what happens when scale arrives before cost discipline. Suppliers with PSNY exposure may be forced into concessions or longer payment terms, which can quietly tighten working capital across the chain over the next 1-2 quarters. If management cannot show a path to positive contribution margin excluding credits, the stock remains a financing trade, not an operating one.

The contrarian angle is that the bearish case may be partially crowded, but the market is still underpricing dilution and restructuring risk relative to “undervalued” screens. The most important catalyst is not next quarter’s demand, but the next capital event: any equity raise, debt amendment, or asset-sale monetization would reset the equity lower even if unit sales hold up. A sustained re-rate only happens if gross margin turns positive on a clean basis for multiple quarters and FCF burn narrows materially, which is more of a 6-12 month story than a days-weeks catalyst.

Key Decisions for Investors

• Short PSNY on strength; use a 1-3 month horizon and treat rallies tied to delivery or revenue headlines as exit liquidity. Risk/reward favors the short as long as gross margin stays deeply negative and financing remains unresolved.
• If available, buy PSNY put spreads 2-4 months out to express downside while capping theta bleed; target a move tied to dilution/refinancing risk rather than operational collapse.
• Pair trade: short PSNY vs long a higher-quality EV manufacturer or auto supplier with positive gross margin and stronger balance sheet; the spread should widen if the market starts pricing PSNY as a funding risk rather than a growth name.
• Avoid long exposure until there is evidence of 2 consecutive quarters of positive adjusted gross margin and a visible reduction in cash burn; otherwise any rally is likely to fade within weeks.
• For event-driven desks, monitor for capital-markets announcements over the next 30-90 days; any equity-linked financing should be treated as a high-confidence catalyst to add to the short.