Sign InNikola Corporation Faces Challenges Amidst Potential for Future Growth
Summary
As of the analysis on September 5, 2023, Nikola Corporation faces significant challenges and uncertainties, with negative news, losses, and recalls casting a dim light on the company, but its low stock price and optimism from analysts suggest potential for future growth if it can navigate through these obstacles.
Fundamental Analysis
Nikola Corporation is a key player in the zero-emissions transportation and energy infrastructure industry. It currently has a market cap of $1.01 billion, with 856.33 million outstanding shares. The company's EPS is -1.32 with the price to earning (PE) ratio at -0.89, indicating a negative earning. Such a value generally suggests the company is not profitable, which could potentially be a concern for investors.
For target earnings presented by analysts, the median estimate is $10. The lowest target presented is $8 and the highest is $12, while it's trading at $1.18. This discrepancy suggests that analysts are foreseeing the potential for substantial growth, despite the current momentum. This is supported by the consensus of "Buy" with 1 strong buy, and 6 suggestions to buy, compared to only 2 hold suggestions.
Nevertheless, news regarding the company's recent challenges casts a dim light on the stock. Nikola's founder Trevor Milton lost his juror bias claim, potentially negatively affecting the company. Furthermore, a recent recall of Nikola's Tre electric trucks, resulting in a plummet in stock value, continues to raise concerns over the company's capability to generate a profitable return on its products.
Technical Analysis
From the technical side, the company's stock is currently trading below the 50-day moving average of $1.86 and the 200-day moving average of $1.79, which indicates that NKLA is in a downtrend.
Looking at the relative strength index (RSI), it stands at 26 which is near the oversold threshold and indicates selling exhaustion. There's a possibility for a reversal, but the MACD standing at -0.442 demonstrates a negative trend which may deter potential investors.
Price Prediction
Using the current data and trends, the stock price for the next trading day, September 5, 2023, might see negligible changes as profiled by a flat change. Over the course of the upcoming week, given the resistance at $1.19 and support at $1.1, the price is expected to revolve around this channel unless a breakout occurs.
Final Evaluation
Given the above analysis, Nikola Corporation could potentially be a Hold. The company is fighting significant headwinds in the form of negative news, losses, and recalls. However, the firm's relatively low stock price and the optimism from analysts suggest potential for future growth. This implies possible upward mobility if the company can tactically navigate through its current challenges.
