During Tuesday’s normal trading session, the price of Workhorse Group Inc. (NASDAQ: WKHS) dropped by -$14.87 to trade at $16.47. Compared to its average daily volume of 16.30M shares, WKHS’s stock’s trading volume is 78.06M shares, which is high. One reason was a deal with the United States Postal Service (USPS) awarded to the military truck manufacturer Oshkosh Corporation (NYSE: OSK).
50,000 to 165,000 trucks are being supplied by Oshkosh under a ten-year contract by the USPS. The first tranche will be 482 million dollars. The contract may be worth up to $ 5.7 billion. When news of Oshkosh’s victory spread, the speculators sold their shares early, believing Workhorse would win the contract.
However, Workhorse still has long-term prospects. A few months ago, WKHS stock varied about rumours of a USPS contract. Even so, a deal for the supply of hundreds of thousands of trucks was unlikely, as the company only began delivering the first vehicles in mid-2020. Additionally, Oshkosh has a reputation of being a major manufacturer of multipurpose vehicles, and it has established a position in the market to supply hybrid-powered vehicles to the USPS.
The USPS may place future orders with Workhorse as production expands. The company is just now ramping up production on a large scale, and its first orders have been received. Pride Group Enterprises ordered 6,320 C-Series trucks from Workhorse in January.
WKHS shares continue to receive positive recommendations on Wall Street as electrification of last-mile logistics is imminent. Workhorse can leverage this trend to expand sales by partnering with service providers looking to cut costs.