Nikola Corporation Stock Declines Amidst Recalls and Legal Disputes, but Analysts Remain Bullish

Summary

Nikola Corporation's stock (NASDAQ: NKLA) closed at $1.17 on September 05, 2023, demonstrating a modest decline by $0.01 (-0.85%). The trading ranged between the price low of $1.06 and high of $1.1999. Despite the ongoing downfall, the consensus among analysts seems positive with a majority recommending "Buy". The company has recently been in the news primarily due to the large-scale recall of its trucks and legal disputes involving its founder, both of which potentially contribute to the company's negative performance.

Stock Behavior Analysis

Looking at the overall yearly performance, NKLA has fluctuated between a year low of $0.52 and a year high of $5.58. As of now, Nikola Corporation maintains a market cap of approximately $1 billion with a total of around 856.33 million shares outstanding. The company's average volume stands at approximately 86.31 million, with the latest trading volume noted as around 46.26 million.

In terms of NKLA's technical indicators, the 14-day Relative Strength Index (RSI) sits at 21, indicating that the stock could be oversold. The Moving Average Convergence Divergence (MACD) value at approximately -0.46 also signals a possible downward trend. Nikola Corporation's 50-day and 200-day moving averages stand at $1.85 and $1.78 respectively, indicating a short-term downtrend as the current price is below both averages.

For the next trading day on September 06, 2023, the immediate support and resistance levels are at $1.1 and $1.19, respectively.

Earnings and Valuation

Nikola Corporation shows a negative Earnings Per Share (EPS) at -1.45, presenting a risky investment profile. The company's PE ratio is also negative at -0.81, reflecting investors are massively incurring losses at the current earnings rate.

The company's discounted cash flow (DCF) analysis estimates a value of $1.70, suggesting a potential underestimation of the stock at its current price.

Analysts' Recommendations, Targets and News

Despite the rather bearish indicators, analysts offer a more positive outlook on NKLA. The consensus among them is a "Buy". They predict a low target of $8 and a high target of $12, with a median target at $10, reflecting a significant potential increase compared to the current price.

In terms of recent news, Nikola Corporation has faced some obstacles. A massive recall of over 200 trucks––more than double the production for the year––and the challenge against Nikola's founder related to juror bias, have both drawn attention. These situations might have added to investors' concerns affecting the stock's performance negatively. On the other hand, the company has announced a "Fireside Chat" and Q&A session with their CEO, aiming to communicate more effectively with its shareholders, which might positively influence the investors' perspective.

Predictions and Final Evaluation

Given the data, NKLA might continue to experience volatility in the short run. However, the general consensus from analysts indicates potential for medium to long-term growth.

For the next trading day, the stock may likely fluctuate between the support and resistance levels, mainly influenced by market trends and investors' sentiment. Over the upcoming week, the trend could maintain a similar pattern unless influenced by significant market news or company-specific factors.

In conclusion, although NKLA currently demonstrates a high-risk profile due to its negative earnings and significant recent setbacks, its discounted cash flow and positive analyst consensus suggest potential for growth. Therefore, Nikola Corporation's stock can be considered a "Hold" for short-term investors due to the present uncertainties. However, for long-term outlook, based on the analysts projections, it could be viewed as a "Buy" once there is a clearer resolution of the company's current issues.