Microvast (US:MVST) ZACKSยท2025-09-04 16:26Core Insights - Microvast Holdings (MVST) is focusing on its Huzhou Phase 3.2 expansion strategy to enhance growth in the China market, increasing manufacturing capacity by 2 GWh for high-energy nickel manganese cobalt (NMC) 53.5 Ah cell technology [1][9] - The global NMC battery market is expected to grow at a CAGR of 14.8% from 2025 to 2034, with China's electric vehicle (EV) market projected to grow at an annual rate of 2.5% from 2025 to 2029, positioning MVST favorably in this expanding market [2] - Financially, the Huzhou expansion is anticipated to significantly contribute to MVST's top-line growth, which saw a 9.2% year-over-year increase in Q2, with expectations for gross margin improvement beyond a recent 220 basis points expansion [3][9] Risks and Challenges - The success of the Huzhou project may face execution and timing risks, including potential customer loss due to delays in equipment installation and geopolitical uncertainties such as tariff wars [4] - If a portion of production is aimed at the U.S. market, it could lead to higher prices for U.S. customers, potentially limiting MVST's market presence, emphasizing the need to focus on the growing China market [5] Market Performance - MVST's stock has surged 851.3% over the past year, outperforming both AirJoule Technologies Corporation (AIRJ) and Yext (YEXT), while the industry overall has increased by 75.4% [6] - Year-to-date, MVST has gained 24.6%, underperforming Yext's 44% growth but outperforming the industry's 20.5% rally and AirJoule Technologies' 42.4% decline [10] - MVST currently trades at a forward price-to-earnings ratio of 10.01, significantly below the industry's average of 27.4, and holds a Value Score of D [10] Earnings Estimates - The Zacks Consensus Estimate for MVST's earnings has increased by 46.2% for 2025 and 20.8% for 2026 over the past 60 days, indicating positive market sentiment [12]