Expion Falls 35% in Six Months: Should You Buy the Dip or Wait?

Expion Energy, Inc. XPON shares have lost 34.8% in the past six months compared with the industry’s 10.4% decline. It has also lagged the broader Zacks Oils-Energy sector’s 8.7% rise and the S&P 500’s 13.4% increase in the same time frame. Expion faces soft original equipment manufacturers (OEM) order volumes, customer concentration, persistent losses, liquidity pressure, a heavy cost base, and supply-chain and tariff exposure.

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What’s Weighing on XPON’s Performance?

Expion faces notable demand and customer-concentration risk. Net sales fell 32.1% year over year to $2 million in the second quarter of 2026, while first-half 2026 sales declined 28.6% to $3.6 million. OEM customers entered the year with elevated battery inventories, tempering orders. Moreover, two customers generated about 57% of quarterly sales and represented roughly 73% of accounts receivable at June 30, leaving results exposed to changes in purchasing volumes among a small number of customers.

Liquidity remains a major constraint. Expion used $2.6 million of cash in operating activities during the first six months of 2026, while cash and cash equivalents fell to $1.5 million from $3 million at year-end 2025. The company has never achieved profitability or positive operating cash flow and expects additional losses for the foreseeable future. 

The company’s expense base remains heavy relative to its current revenue level. Selling, general and administrative expenses reached $4.1 million in the first six months of 2026, up 13.9% year over year, and represented 115% of sales versus 72% a year earlier. Higher legal and professional fees tied to capital-markets activity and increased salaries and benefits contributed to the increase. This cost structure, combined with lower sales, widened the six-month operating loss to $3.1 million from $2.5 million.

Supply-chain exposure and input-cost volatility are additional headwinds. Expion relies on third-party manufacturers, largely in Asia, and 74% of inventory purchases in the first six months of 2026 came from Asian suppliers. Raw materials account for more than half of cost of goods sold, making lithium-price movements, inflation, currency fluctuations and tariffs relevant to unit economics. Management also expects that additional tariffs may affect Asian-sourced products, while supplier transitions could take time and add costs.

Competitive and mix pressures could also limit margin progress. Expion competes with both lead-acid and lithium-ion battery manufacturers, including companies that may have greater resources or lower sourcing costs. This can require the company to reassess costs, reduce pricing or raise volume to protect profitability.

Stock Valuation

The stock is currently trading at a discount compared with the historical levels and industry average. It is trading at a trailing 12-month EV/sales multiple of 0.47X compared with the past five-year median of 0.94X and the industry’s figure of 7.64X. It is also lower than two of the company’s peers, Energy Vault Holdings, Inc. NRGV and Clearway Energy, Inc. CWEN, which stood at 3.7X and 9.29X, respectively.

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Can XPON Power Through the Challenges?

Expion’s core battery business has several favorable growth drivers. Its expanded Forest River relationship now covers Georgetown and Dynamax Grand Sport alongside existing programs, while recently added distributors and OEM customers are expected to support order opportunities later in 2026. Three next-generation batteries planned for the second half of 2026 offer higher capacity, VHC heating, SmartTalk connectivity and CANBus, with redesigned platforms intended to improve manufacturing efficiency and margins.

Expion’s broadened energy strategy also creates additional growth opportunities through its entry into oil and gas. The Eastern Louisiana acquisition provides a drill-ready prospect with existing leasehold acreage, a wellbore, mineral title work and a local operating partner. Management sees potential demand support from nearby hyperscale AI data-center development and Gulf Coast LNG infrastructure.

Wrapping Up

Despite customer concentration, liquidity constraints and cost pressures, Expion’s expanding OEM relationships, broader distributor network, planned next-generation battery launches and diversification into energy assets could provide additional avenues for longer-term growth. Also, the stock seems undervalued at the moment. Therefore, the decline in its share price presents a lucrative opportunity for investors to add the stock to their portfolio. 

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This article originally published on Zacks Investment Research (zacks.com).

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