Polar Power Inc (POLA)

[ebase22]

My pause for concern on this story though is that the falling short wasn’t just a delay in engine supply. They lead with that to try to make this sound like an external problem, but it was also because of engineering retooling for t-mobile and a delay in opening the 2nd facility/having difficulty with the 2nd production shift.

So while these may be temporary problems, there is evidence that they continue to not be able to perform as they claim they are soon able to do. And while it’s great that demand for the product is there and they are growing sales, with their higher fixed cost structure now (not to mention higher exec pay), if they can’t get their operation act together, they are not going to hit those gross margin levels needed to drive profitability.

The current share price is not assuming them making 2 cents a quarter. For this to take off they need to be on the firecrackers future making 10 cents a quarter anyway.

They need to be able to prove that they can do that and that production cost over runs and lastminute engineering retooling aren’t just the norm leading to perminant 30% gross margins rather than 40%.