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Nikola Corporation Stock Analysis: Buy Rating Supported by Fundamental and Technical Factors

StockInvest.us, 1 month ago

Nikola Fundamental Analysis

The Nikola Corporation, with NASDAQ ticker 'NKLA', had a last close of $1.46 on October 03, 2023, which represents an increase of $0.05 or 3.55% from its previous close. The company has an immense market capitalization of $1.44 billion. Their earnings per share (EPS) is noteworthy, standing at -$1.38 with a Price to Earnings (PE) ratio of -1.06. With nearly 985.20 million shares outstanding, the financial health of the company can be analyzed effectively.

The announcement of a pending earnings announcement on 11/01/2023 is a significant event anticipated by investors. A consensus expectation from several analysts suggest a 'Buy' recommendation with strong support to buy (strongBuy: 1, buy: 6) combined with a hold suggestion by 2 analysts. None of the analysts recommend selling the stock in the near term.

The company's Discounted Cash Flow (DCF) currently stands at approximately $1.99, somewhat above the current selling price. Targets for the stock vary between a low of $8 to a high of $12, with a median of $10 suggesting room for growth.

Addressing Nikola's recent news, the company reportedly needs to raise about $600 million before it can achieve self-sustainability. Despite past controversies, the company is making strides with its hydrogen fuel cell truck being brought to market.

Technical Analysis

The technical indicators for NKLA present some interesting points. The Relative Strength Indicator (RSI), a momentum oscillator that measures the speed and change of price movements, is currently at 67, suggesting the stock is neither in an overbought nor oversold position.

Nikola The Moving Average Convergence Divergence (MACD), a trend-following momentum indicator, is at 0.05. The 50-day and 200-day moving averages stand at $1.68 and $1.66 respectively, both higher than the last close. The stock closed at $1.46, battling support at $1.40 and resistance at $1.51.

Furthermore, the trading volume of NKLA on the last closing day was close to 38.59 million, lower than the average volume of 94.19 million. This could suggest less trading interest or lower liquidity in the stock.

Stock Prediction & Evaluation

Given the combination of the fundamental and technical analysis, analysts recommend a 'Buy' consensus for the Nikola Corporation's stock. The current price is below the median target price of $10 and well below the high target of $12. Despite short-term volatility induced by news and market conditions, investing in the company could be profitable, especially if the company fulfils its goal of becoming self-sustainable.

For the next trading day, October 04, 2023, the stock price might witness minor fluctuations depending on overall market sentiment. However, due to the current momentum and positive news surrounding the company, the stock is projected to remain within the $1.40 support and $1.51 resistance.

For the upcoming week, the stock could potentially look for a breakout above its resistance, seeking a return to its 50-day moving average (around $1.68). The volume of trading and forthcoming earnings announcement will play a significant role.

Final Evaluation: Buy

Based on all the presented data, Nikola Corporation's stock is categorised a 'Buy'. Reasons include the current price being below the median target price, the company's progress in its business endeavours, and the positive buy consensus among several analysts. However, it is recommended investors monitor market dynamics and company news closely, as stock performances are often subject to rapid changes.

Check full Nikola forecast and analysis here.