We recently started a series called “Penny Stock of the Day”. These ideas are geared towards traders with an extremely high risk appetite.
Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.
Penny Stock of the Day: LiveWire Group, Inc. (NYSE: LVWR)
Today’s penny stock pick is the LiveWire Group, Inc. (NYSE: LVWR).
LiveWire Group, Inc. manufactures and sells electric motorcycles in the United States, Austria, and internationally. It operates in two segments, Electric Motorcycles and STACYC. The company designs and sells electric motorcycles and parts, electric motorcycle parts, electric balance bikes for kids, accessories, and apparel. It sells its products to wholesale, independent dealers, and independent distributors, as well as direct to consumers online. LiveWire Group, Inc. was founded in 2010 and is based in Milwaukee, Wisconsin.
Website: https://www.livewire.com/
Latest 10-k report: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001898795/5d37558d-8adf-45d5-bc36-b1d7d0455539.pdf
Analyst Consensus: Not covered by Wall Street analysts.
Potential Catalysts / Reasons for the Hype:
- The company reduced its operating loss by $9.6 million in Q1 2025, driven by a $7.4 million cut in selling, administrative, and engineering expenses. Relocating LiveWire Labs to Milwaukee has also lowered costs.
- The company is focusing on developing future electric motorcycle models and product innovation, which could strengthen its market position in the premium EV motorcycle segment. LiveWire is prioritizing strategic product launches in 2025, including new electric motorcycle models, which could boost sales and investor interest if well-received. Beyond motorcycles, LiveWire is also producing electric balance bikes, targeting younger consumers and diversifying its product portfolio.
- As a Harley-Davidson offshoot, LiveWire benefits from its parent company’s brand legacy and is carving out a niche in the high-end electric motorcycle market, potentially appealing to a loyal customer base.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern Breakout: The daily chart shows that the stock has been forming a falling wedge pattern for the past several months. These are marked as purple lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out from the falling wedge pattern with a high volume. Once the stock breaks out of the falling wedge pattern, it could move higher.
LVWR – Daily Chart
#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.
#3 Price above MA: The stock is currently above its 50-day SMA, indicating that the bulls have currently gained control.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates bullishness.
#5 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink dotted line. This looks like a good area for the stock to move higher.
LVWR – Weekly Chart
#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#7 MACD above Signal Line: In the weekly chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for LVWR is above the price of $4.25.
Target Prices: Our first target is $5.40. If it closes above that level, the second target price is $6.50.
Stop Loss: To limit risk, place a stop loss at $3.60. Note that the stop loss is on a closing basis.
Our target potential upside is 27% to 53%.
For a risk of $0.65, our first target reward is $1.15, and the second target reward is $2.25. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Potential Risks / Red Flags:
- The company has incurred net losses since its inception, including net losses of $93,925 thousand, $109,550 thousand, and $78,938 thousand for the years ended December 31, 2024, 2023, and 2022, respectively.
LVWR – Consolidated Statements of Operations
- Hedge Funds Decreased Holdings by 18K Shares Last Quarter.
Hedge Funds | Source: TipRanks.com
- LiveWire is a spinoff from Harley-Davidson, and its financial results are discussed in Harley-Davidson’s earnings calls. Though this relationship provides brand credibility, it also ties LiveWire’s performance to Harley-Davidson’s broader strategy.
- Corporate Insiders placed Informative Sells of Shares Worth $322.7K in the Last 3 Months.
Insiders | Source: TipRanks.com
- Potential tariffs, especially from China, could significantly affect LiveWire’s financials, with estimated costs ranging from $130 to $175 million in 2025. This adds pressure on margins and profitability.
- The EV sector, including electric motorcycle companies, faces a tough 2025 due to market saturation and reduced consumer demand.
- Despite being a loss-making company, the executives are being paid significant compensation.
LVWR – Executive Compensation
As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses! Today’s stock may outperform in the niche EV motorcycle market if it capitalizes on brand traction and innovation but remains vulnerable to macro headwinds.
Happy Trading!
Trades of the Day Research Team
READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.
Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.
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Source: Trades of the Day
