Microvast Shares Face Mounting Headwinds

Microvast Holdings US59516C1062

As the year draws to a close, Microvast Holdings finds its equity under selling pressure. This trend is not driven by poor revenue performance but stems from an ongoing legal probe and pronounced technical weakness, which have cooled an earlier rally. While the company demonstrates clear top-line growth, it continues to operate at a loss. The critical question for investors is whether management can swiftly dispel the uncertainty now clouding the stock.

The operational picture presents a mixed bag. For the third quarter of 2025, Microvast reported revenue of $123.3 million, marking a solid 21.6% increase compared to the same period last year. Despite this growth, the company remained unprofitable, posting a net loss of $1.5 million for Q3 2025. A brighter spot was the improvement in gross margin, which expanded by 4.4 percentage points to 37.6%, and the reduction in losses offers a partially positive signal.

Management has reaffirmed its full-year 2025 revenue guidance in the range of $450 million to $475 million. Notably, market analysts have not adjusted their estimates over the past 30 days, suggesting a wait-and-see approach for greater clarity on the outlook for 2026.

Key Operational Data:
* Q3 2025 Revenue: $123.3 million (21.6% year-over-year growth)
* Q3 2025 Net Loss: $1.5 million
* 2025 Revenue Forecast: $450–475 million
* Technical Sentiment: Overwhelmingly negative, with 23 sell signals versus 3 buy signals

Legal Scrutiny Weighs on Investor Sentiment

Adding significant pressure is an investigation by US law firm Halper Sadeh LLC. The probe is examining whether certain members of the board breached their fiduciary duties to shareholders. Questions center on corporate governance, internal controls, and potential irregularities during the company's rapid expansion phase. This legal overhang has shaken investor confidence, elevating concerns about transparency and raising the possibility of shareholder demands for governance reforms or restitution.

Technical Indicators Signal Continued Weakness

The stock's technical posture reinforces the negative sentiment. Currently trading at €2.38, the share price sits approximately 27% below its 50-day moving average of €3.24. A preponderance of technical indicators are flashing sell signals, with a tally of 23 sells against just 3 buys. The Relative Strength Index (RSI) is elevated at 73.4, and 30-day annualized volatility is high at 61.62%, conditions that typically favor short-term price swings.

Recent trading action saw the equity fail to maintain levels above the €2.80 threshold, triggering additional selling pressure as short-term traders opt for liquidity over establishing longer-term positions.

Path Forward for the Battery Maker

In the near term, the stock is likely to remain influenced by the dual challenges of legal uncertainty and technical weakness. A sustained recovery would require either a clear resolution of the investigation or concrete, positive catalysts that bolster confidence in the 2026 forecast. From a chart perspective, a decisive move back above the 50-day moving average around €3.24 would serve as an initial signal of trend stabilization. In the absence of such developments, shares are expected to stay under pressure.