At the end of May, Hyliion (HYLN) caught the market’s eye with a breakthrough that turned the tide in its favor. The company secured selection from the Air Force and the Department of Defense’s Chief Digital and Artificial Intelligence Office to meet a critical operational need. 

Hyliion will supply its KARNO power modules which will help the Air Force maintain essential functions during fuel supply disruptions by effortlessly switching between available fuels. Investors reacted swiftly, sending HYLN stock up by 50% on May 28. 

Having earned status to directly support the Air Force, Hyliion now stands on firmer ground and can help the military’s shift toward a more flexible and resilient energy framework. 

With a significant catalyst behind it and a nearly 50% upside potential, how should you play HYLN stock here? 

About Hyliion Stock

Hyliion (HYLN), is currently valued at $251 million. The company develops generators for stationary and mobile use. Its flagship KARNO generator operates on conventional fuels, landfill and wellhead gas, plus renewable hydrogen and ammonia, delivering versatile, efficient distributed power solutions across a wide range of energy sources.

Despite the broader market winds pushing against it, with a year-to-date decline of 47.5%, HYLN has now turned the tables. Over the past month, the stock has climbed by nearly 9%, in attempt to turnaround its story. 

Hyliion Misses On Q1 Earnings

On May 13, Hyliion released its first-quarter earnings report for 2025, revealing results that fell short of Wall Street’s projections. The company reported revenue of $489,000, primarily derived from research and development services under its contract with the Office of Naval Research. The figure lagged the anticipated $1.1 million. 

The cost of revenue stood at $477,000, leading to a near-breakeven gross margin for the quarter. Operating expenses climbed 3.9% to $19.7 million, driven by an increase in R&D spending, which surged to $12.2 million from $8 million in Q1 2024. The jump reflected intensified activity in additive manufacturing, procurement of long-lead components, and escalating costs tied to ongoing development of KARNO Power Modules. 

The bottom line showed net loss widening 10.7% to $17.3 million. Loss per share grew 11.1% year over year coming in at $0.10, missing the expected $0.08 per-share loss. 

Consequently, the company now anticipates full-year 2025 cash outlays around $65 million, an increase from its previous $60 million guidance. Hyliion has maintained its full-year revenue guidance of $10 million to $15 million, propelled by KARNO module sales and ongoing R&D services, while projecting a year-end cash and investment balance near $155 million. 

Analysts, meanwhile, foresee the Q2 loss per share widening by 50% to $0.09 and full-year 2025 losses increasing by 17.9% to $0.33. The outlook for 2026, however, shows a silver lining, with loss per share expected to narrow by 3% to $0.32.

What Do Analysts Expect for Hyliion Stock?

Despite unveiling fresh developments and forging new collaborations, Hyliion finds itself grappling with sluggish revenue growth and mounting operational expenses. A single announcement of a military partnership, while promising, falls short of igniting strong investor confidence in the stock. 

Currently, HYLN carries a “Hold” consensus with only one analyst in coverage. That analyst has a price target of $2 on shares, representing upside potential of nearly 50%.